A personal loan agreement is concluded between two natural persons, ie private individuals. These may be relatives or friends, or unknown third parties. Various portals can be found on the Internet for this, in which contacts between borrowers and lenders are brokered and private loan agreements can be concluded. Peer-to-peer credit or P2P credit are other names for the personal loan agreement.
Personal loans are becoming increasingly popular. The reason for this is the uncomplicated and on-eye negotiation. Credit institutions seldom negotiate in the low to normal income ranges. In the case of negative Pearl entries, insecure financing intentions or missing documents, a loan is often rejected. The interest rates are much higher with credit institutions, as different expenses have to be covered by the interest.
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The personal loan agreement is usually against payment, otherwise, the correct name would be loan or donation. Paid for means that interest or one-time fringe benefits are paid to grant the loan. The terms of the loan agreement are freely negotiable; however, they must not be immoral or inappropriate.
The personal loan agreement is not formal. Usefully, especially for evidence and proof purposes, this contract should be fixed in writing and signed by both parties – borrower and lender.
The Contracting Parties are free to deposit securities. It would be conceivable a mortgage note, registration certificate Part II (also known as vehicle registration) or other assignments of rights (patents, pensions, etc.). In such a case, the lender pays the agreed loan amount only after it has been given the agreed security. If the borrower repays the loan amount plus interest or fringe benefit, the deposited security will be returned.
In the private credit agreement, both parties should be named by name and with the addresses given. Tip: The mutual control of this data on the basis of identity documents offers even more security.
The amount of the loan and the amount of interest or one-off benefits should also be included in the contract. The amounts can be listed in words and numbers to avoid typing or transmission errors. The concrete method of calculating the interest is also helpful since often private individuals can not make these calculations themselves for lack of knowledge.
It is also advisable to include a repayment date. The more precise the provisions are already made in the contract, the fewer problems that can arise afterward. In particular, in the family environment or in the circle of friends should be taken to ensure that there is no misunderstanding about the repayment.
On the Internet, there are numerous examples of such personal loan agreements that can be easily and simply downloaded and adapted to personal needs. the most important thing is the annual percentage rate or APR.
For hedging, it may also be advisable to include a foreclosure submission in the contract. If the borrower submits to foreclosure, however, the formal requirement of notarial certification applies. The advantage of this variant is that in the case of repayment problems no protracted litigation has to be conducted, but the direct acceptance of foreclosure measures is possible. Otherwise, the involvement of a lawyer is often required. It is therefore very important in this area to find a serious partner.
In addition to the personal loan agreement, the receipt should also be in writing. A receipt is conceivable with payment and repayment of the loan amount, but also with the delivery and return of possible security.