State specific terms of a loan and repayment
State loan terms and protect against default
Specify terms of loan repayment
Make a written demand for money owed to you
Provide security for loan with collateral
Set terms for a loan to be paid in installments
Make an agreement to settle an outstanding debt
Acknowledge a debt with a signed agreement
Guarantee a loan with personal property
Loan money and request payment on demand
Help someone secure a loan as a guarantor
Document the terms and conditions of a loan
Set loan terms with larger payments at the end
Ensure a loan is repaid on a specific date
Notify the estate that you are owed money
Organize details of a debt owed to you
Get additional proof of a good credit history
Establish order of loan repayments to creditors
Get a person's credit history before loaning money
Lend or borrow money FAQs
Most financial advisors will tell you not to lend money to friends and family; however, if you feel the need to help your friends and family, you should make sure you protect yourself the best you can. First, never loan money you cannot afford to lose. Second, start by making a Loan Agreement that both you and your family member sign willingly.
Why not? Especially if the loan amount is over the tax-free limit amount of $14,000. The IRS may, on larger loans (or "gifts"), charge taxes for the interest you could have collected on the loan. So, you may as well charge interest. Charging interest also shows the borrower that you are taking the loan agreement seriously. Our Loan Agreements include the option to charge interest and can create an amortization table for you.
How much you decide to charge in interest is up to you. Most financial advisors recommend five to ten percent. In many states, you may not be able to charge what might be considered excessive interest. High interest rates may be considered predatory and bad for the consumer, even in regards to personal loans. If you want to charge more than ten percent, make sure your state laws do not prohibit it first.
If you can avoid borrowing money in the first place, you are better off in the long run. But if you need to borrow money, you should seek the best possible terms.