How is a loan agreement between individuals

Currently, when a private individual needs financing, they may encounter a series of difficulties that can prevent them from accessing credit.

Given this fact, it is very common to search through press announcements and on the Internet for a solution that gives us a thread of hope in solving our economic problems.

But do we really know what a loan agreement between individuals looks like ?

Why a loan agreement between individuals?

Normally a bank manages the credit entries through a team of analysts who determine the viability of the application itself. An analyst does not assess any aspect of the operation ', he only sees numbers, that is, if you are currently unemployed and have no income, or are simply in the Credit Checker due to some historical problem with a debt, you are automatically not an interesting client for any credit institution.

It is in these moments when the private financing of an individual can solve your financial situation. It may be easier for a private individual to trust you than for a bank.

But for this process to come to fruition, it is necessary to draft it through a contract that reflects the members of the loan and the conditions that are agreed, such as the borrowed capital, the agreed interest and the time for its repayment.

All this can be reflected in a basic type contract or for greater security of the lender in a minute / deed that is registered in a guarantee or endorsement of the borrowing party.

Trust. A simple word with a great meaning

For an individual to trust you, you will have to offer them some type of guarantee. The websites that are dedicated to private equity or loans between individuals require that the applicant for a loan provide a real mortgage guarantee.

A real mortgage guarantee is the presentation by the loan applicant of a guarantee whose responsibility (including the borrower) falls on the amount loaned plus interest and legal expenses (in the event of a legal claim).

The most interesting real guarantees for a private investor who dedicate himself to loans between individuals will be those that in the case of a mortgage award for non-payment of the loan have a better market outlet, which would allow a return on the investment to the lender. .

Guarantees such as homes in populated urban areas and large capitals such as Madrid, Barcelona, ​​Valencia, Seville, etc., are very interesting to guarantee a loan operation between individuals.

Another type of guarantee that is often interesting are houses and chalets as long as it is not in a rustic area. Rustic areas tend to have a more uncertain value due to the possibilities of requalification that a public body can exercise, ultimately influencing their initial market value.

The simple note. The DNA of your guarantee

When a real guarantee is provided, it is very common in addition to requesting a Simple Note to the property registry . This document indicates the current status of your guarantee: free of charges, mortgage, liens, etc. Depending on this status, your request may or may not be interesting.

Also a very important piece of information that a simple note provides is the ownership of the guarantee . This allows an applicant to not be able to provide a guarantee of another person or usurp their identity, knowing that the applicant of a loan is the holder of the guarantee is necessary for the operation to be carried out correctly.

Registry charges, the true story of your guarantee

The charges are the debts that have been contracted providing the guarantee. A simple note identifies the current status of your loads and if you have incurred debts or have liens attached to it. If they appear, each one must be identified with the necessary certificates that indicate its current status, pending or canceled debt.

The appraisal, the real value of your guarantee

For an individual to lend you money, it is important that the current real value of the guarantee that is provided is known. Currently, between individuals, only 30% of the market value / appraisal of the provided guarantee is being offered, the appraisal indicates how far one can go: what one wants and what it really is .

The loan. How much money can I request?

Negotiating with individuals is very simple. When an operation enters the P2P lending peer-to-peer lending platform , investors identify the value and quality of the investment, offering the amount requested if they are of interest.

In general, except on rare occasions (if the quality of the guarantee allows it), the market for loans between individuals does not offer an amount greater than 30% of the value indicated by an appraisal by a company approved by the BDE.

The interest on the loan is set by the investor who offers his money, waiting for the individual to accept his offer. The destination of the loan and the intention shown by the applicant to return it, are important data to confirm the request.

Notary, registration, agency and more expenses

Currently the expenses caused by a loan between individuals are high, so this type of loan is not logical to request small amounts or microcredits.

But I will briefly detail the expenses arising from a credit operation between individuals.

  • Notary € 700.
  • Registration € 300.
  • Management 360 €.
  • € 320 appraisal (depending on the property and meters).
  • Tax on Legal Activities depends on the autonomous community 1.20 to 1.25 of the calculation of total mortgage liability.

In some cases it is necessary to carry out procedures if the presentation is made electronically UNILATERAL, with which the expenses can increase € 120 more.

The loan contract between legal and secure individuals

This contract is a home equity loan deed. Currently the law that governs this type of contract is “Law 1/2013 of May 14”.

On our platform, the law obliges us to offer a binding offer three days in advance and the minute that will be carried out at the notary is also offered for the report or study by a professional lawyer / advisor of the client requesting the loan.

With all this currently the correct realization of a loan between individuals from its approval lasts around 4/5 days.

2 opinions on "How is a loan agreement between individuals"

  1. The credit agreement between individuals is not sufficiently known. It facilitates the possibility of doing it with family or friends with lower costs than bank loans.

    1. Certain txema. The subject of contracts between individuals is not well known but it has always existed. It is our task to make people aware of this possibility.

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