Lending money to a family member or friend can be a mockery task. It goes without saying that money can create problems and solve all your problems in the same way. For this reason, financial involvement often ruins relationships with family and friends. This is why most financial experts advise against borrowing a family member or friend. After all, you have no guarantee that you will get your money back. However, there are strict but useful steps you can take to help your family member or friend get out of a difficult financial situation without ruining your relationship with them. If the loan is secured by a guarantee, the guarantor and lender should also sign the guarantee agreement attached to the document. Please note that if both parties are individuals (for example. B family members or friends), a certificate should be used instead of a loan contract. The money to be borrowed should then be advanced on the date set out in the agreement and the repayment will begin in accordance with the terms of the agreement. In this short blog, we provide you with a template for a free family credit contract.
The agreement provides that the money is paid to the borrower in a lump sum in a single day. The refund is also made on a fixed date. However, there is a provision that allows the lender to require repayment of the loan at any time, subject to written notification. The borrower is required to repay the loan at the end of the contract notice period (for example.B. could be set at one month to allow the borrower sufficient time to find the funds). While interest rates may conflict with the original intention of offering the loan to a family member, they are a necessary evil to maintain professionalism. First of all, like all other institutions, you will be doing your money a favour by calculating an interest rate, because it would have earned a decent interest if it could have been used in a different way. In this way, you can compensate for any losses that may occur during the term of the loan. However, it is important not to set credit limits beyond the IRS thresholds. This is because you have to pay a tax as soon as that threshold is reached. To avoid this, use the current federal tariff, which is offered directly by the government.
This will not only ensure that you get a decent interest rate, but also, you will not be subject to any form of taxation. To enter into a private loan agreement, you must consider the following. Establishing a private loan contract is not ideal, because if you run into problems in the future, you may have a problem if you cannot provide legal arguments in favour of the clauses you have in your private loan agreement. If the borrower is late in its credit payments, the lender can take legal action to close the guarantees to remedy the loss. Lenders may demand guarantees if they lend a large amount of money or if there is a high probability that the borrower will become insolvent. This agreement was signed and dated on loan day is a contract under which a lender agrees to borrow a certain amount of money from a borrower. It sets the terms of the loan, such as the interest rate and repayment period, and imposes obligations on both parties. The family credit contract is a legally binding agreement between two family members that clearly sets out the terms of credit to a family member for the purpose or repayment after a certain period of time with accrued interest.