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Financial institutions offer many credits with often prohibitive rates.
Administrative fees generally amount to 1% of the amount borrowed with a minimum and a maximum depending on the institution.
You have to pay attention to the establishments that announce you a fee (excluding VAT) and thus give you nice surprises when reading your contracts.
By making available administrative documents to individuals so that they can make their own financing, they can find a non-negligible interest by setting their own thermal baths and conditions, notably on rates, duration and amounts committed .
Most often this remains the prerogative of the lender.
Legal limits of rates in 2014/2015:
Loans-among-individuals-creditsFor a consumer loan over 1,524 €: 19,44%
For a cash reserve or overdraft: 20%
Loans-among-individuals-credits For an amortizing loan less than € 1,524: 21.47%
For a home loan the average rate is 4.06%
Loans-between-individuals-credits the effective rate of loans to companies with an initial maturity of more than two years, at variable rates, of less than or equal to 152449 euros (2.51% in the 4th quarter of 2014)
Today it is possible to lend money at rates ranging from 1% (LivretA) to 20.13%.
Why would we leave the banks the privilege of making credence, we can save them from lending to those who need money.
For this you need guarantees on the borrower:
– Identity. (Photocopy of identity card)
– Address of domiciliation.
– Photocopy of pay slip.
– Purchase project.
When you lend money to a person, it is best to have written proof that can justify this debt. So you have to put some criteria in there to make this debt recognition work. It is the borrower who must manually perform this debt recognition. It should be noted that this is obligatory on a civil level if the amount lent is greater than 1 500 euros. The acknowledgment of debt must be dated, and signed by both parties.
It must be drawn up in triplicate, one for the applicant, one for the lender and one for registration.
When lending money to a friend or family member, it is sometimes best to mention this loan in writing so that it does not encounter problems later on.
The existence of an acknowledgment of the debt makes it possible to avoid going to court in case of bad faith on the part of the applicant or the borrower.
When drafting an acknowledgment of debt, you must indicate the repayment terms. If nothing is indicated, the debt may be repaid after a formal notice has been sent. If, despite this, the money is not returned, recourse to the courts is inevitable.
If the amount is less than 4,000 euros, this is fairly easy. However, if it is between 4,001 euros and 10,000 euros, it is the district court that will be seized. If the amount is more than 10,000 euros at that time, a lawyer must be called in because the matter will be referred to the High Court.
Loans between individuals are subject to the rules of the loan contract in general:
– their remuneration is free (within the limits of the usury rates)
– above an amount of € 760, the drafting of a deed, specifying the terms of repayment, is mandatory and entails declaratory tax obligations.
Tax reporting obligations
Before 15 February of the year following the granting of the loan:
– you must declare to the tax authorities any loan in excess of 760 euros, even if it is not formalized in writing, on a printed document n ° 2062 “Declaration of loan contract”, available for download on this site or In a tax center.
If, in a given calendar year, a single creditor or debtor has agreed or obtained several loans of a unit amount equal to or less than EUR 760 but whose total principal exceeds that limit, all such loans must Be declared by the said creditor or debtor: it is therefore not possible to circumvent this obligation by splitting a loan into several loans below that limit.
– if the loan was made with interest, you must declare the amount on printed paper No. 2561, available on this site or in a tax center.
In addition, if you are the lender, you will have to report the interest collected on your income tax return under the heading of income from movable capital.
If you are a lender and liable for wealth tax (ISF), the loan is a debt that must be included in your taxable assets.
Conversely, if you are a borrower and taxable at the ISF, you can deduct the loan from your taxable assets.