Month: November 2019

Loan of money between individuals: is it advisable?

The loan of money between private individuals is certainly not new, but it has always existed. In times of economic hardship, to cope with unexpected expenses , some tend to turn to friends and relatives even before the bank or financial.

But is this form of loan legal ? Is it somehow protected by law? How to behave in these cases?

Is the loan of money between individuals legal?

Is the loan of money between individuals legal?

Yes, this form of loan is completely legal. Indeed, it can present an immediate solution to the urgent need for liquidity (especially if you cannot access other forms of loan if for example you do not have an income or you are protested).

If on the one hand the loan of money between private individuals is a commendable initiative, an expression of support and solidarity from family or friends , on the other hand it is also very easy to run into serious problems on both sides (such as the failure to repay , usury or tax checks ).

So it is better not to act in a “do it yourself” way, but it is advisable to formalize the financing , through a loan agreement between individuals, which has full legal validity.

In the contract, the creditor and the debtor clarify the sum disbursed , the interest rate (if provided), the times and methods of the repayment .

The money can be given in cash only for amounts less than 3000 dollars , while it is mandatory to use checks or wire transfers for higher amounts, for the traceability of payments.

Always act with caution: moving money from one bank account to another always generates suspicions at the Revenue Agency . It is therefore important to justify these operations as transparently as possible, for example with a correct reason for the transfer and with a private agreement attesting the existence of the loan between private individuals .

How does private money lending work?

How does private money lending work?

There are different forms of money loans between individuals. The most common are private writing loans and social lending on online platforms.

Loans with private writing

These are the classic loans between relatives or friends . They can be fruitful, and provide for the payment of interest, which are agreed by consensus (must not exceed the wear rate established by law), or non-interest bearing, if there are no interests.

Although a written contract is not required by law, as we have said it is strongly recommended . This can solve numerous problems that, instead, could arise in case of a simple handshake.

Social lending and online platforms

Appropriately regulated online platforms are also spreading which bring together lenders and applicants .

The service is provided directly online through accredited companies, and the platforms are subject to the supervision of the Bank .

Is the loan of money between individuals convenient?

Is the loan of money between individuals convenient?

This is certainly an instant loan form, which could be very useful for dealing with sudden expenses or economic problems .

The loan between individuals must be properly formalized, to avoid unpleasant inconveniences: if you receive the money you could incur usury , if you give it someone could take advantage of your good faith and not repay you.

It may be appropriate for those who need a loan but cannot access other forms of financing , such as personal loans or the salary-backed loan .

The main disadvantage of the loan of money between private individuals is the tax one: in fact, the taxation is higher than that foreseen for credit institutions.

Indeed, if for bank loans with a duration exceeding 18 months the applied taxes are added together in a “substitute tax” only 0.25% on the amount, in the case of private loans it is due a ‘registration tax of 3% on the amount and one of 0.50% on the mortgage or surety guarantee (in addition to the mortgage tax of 2% on the value of the mortgage, when applicable).

Furthermore, it is not possible to deduct the repayable interest from IRPEF.

So you have to make your own assessments based on your situation.

In some cases, a traditional loan may be the most advantageous solution. Have you already tried to apply for a loan from a bank or financial institution ?

The conditions of the lenders become increasingly flexible , with customized solutions, granting loans even to those who do not have a paycheck .

With our company, you can immediately know if the loan is feasible and the amount of the installment and interest. What are you waiting for to try it, it’s free!

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100% home loan: is it possible to get it?

At the beginning of the economic crisis, in all areas, such as in the sale of real estate, the 100% mortgage was no longer granted as easily as it did when, thanks to the real estate boom , it had been introduced. This was granted to those who wanted to buy a house despite not having savings available but relying exclusively on a stable job.

For some time now, with the new opening of credit by banks, the 100% mortgage formula has reappeared. An extremely precious opportunity for those who want to buy a house but at the same time do not have the immediate availability of adequate economic resources. The amount financed, in this case, corresponds to the entire value of the property.

100% mortgage: the guarantees required

100% mortgage: the guarantees required

Considering what has been written so far, it should be remembered that the current legislation governing land credit establishes that mortgages cannot exceed eighty percent of the value of the property. For the remaining part not granted directly with the loan, it is possible to meet only by drawing up a surety policy , to cover that portion exceeding the limit set by law.

In fact, the credit institutions that intend to proceed with the stipulation of a mortgage, undertaking to transfer sums of money to fully cover the value of the property, do not implement everything without taking due information and precautions. Indeed it can be said that they are very cautious in disbursing this type of financing.

Banking institutions take this extremely thoughtful attitude because 100% mortgages are considered particularly risky , to the point that any lender also adopts specific prudent conditions. These include the increase in the interest rate applied on the loan and, as anticipated, the stipulation of the surety policy which covers the excess part compared to the 80% normally paid.

Obtaining a 100% mortgage however is not as difficult now as it may seem. Banking institutions offer more or less convenient terms, to be carefully evaluated together with an expert credit advisor.

100% mortgage: who can apply for it

100% mortgage: who can apply for it

Most of the requests for 100% mortgages come from young people, under 35 or 40, who wish to engage in the purchase of their first home. But before I put some economic resources aside in my job.

The most convenient solutions offer the applicant, if he prefers to not be aggravated economically during the month, lighter installments, because they are distributed over a longer mortgage term , even in 40 years . These solutions are designed to guarantee greater sustainability of the installment and also give the possibility of flexible management at a spread which, in this way, manages to remain average .

Of course, since it is still an investment, the banks only disburse the mortgage after perfectly analyzing the economic situation of the applicant. So check if there are suitable additional guarantees. This means that the borrower must prove to the lender that you have at least one double household income and a permanent job.

The involvement of a third person who can act as guarantor is often required: a family member, in most cases, ready to commit to pay the debt in case of the contractor’s insolvency.

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