Borrowing money privately is cheap

Loan from a private individual

The advantage of borrowing from a private individual is that there is no BKR review and the interest will usually be reasonable. If you borrow from family or a friend you must of course be sure that you can pay back. This is a danger of borrowing from a family member or friend; an unpaid loan can totally spoil the relationship. It is important that everything is put on paper and signed by both parties. Even though you know each other so well.

Usually a private loan involves larger amounts than a mini loan. The contract specifies the terms and conditions of the loan, the duration and the amount of the repayment. If the loan is immediately due and payable then a tax rate in line with the market must be calculated. Also, the interest may not be too low because then the tax authorities will see this (when declared) as a gift.

The person who lends the money must carefully consider whether the borrower will be able to pay back. Someone who already has a lot of money problems will probably pay back less quickly than an unemployed family member who is waiting for unemployment benefits. Model contracts for a loan to a private individual can be found on the internet. The contract could also be registered with the Tax Authorities until 2013, but that is no longer possible. The tax authorities only register contracts that must be registered, such as property with a lien. The agreements can still be registered at the notary.

Borrow money without credit

If there are no options to borrow money from a bank, there are a number of other options to get money. The first is to go to a pawnshop. Valuables (cars, jewelry) can be borrowed with the choice to buy it back.

Mini Loan

A second option is to take out a mini-loan via the internet. The interest on a mini loan is just as high as with a mail order company. What makes the loan a lot more expensive are the service costs. With a mini loan you pay surcharges if you want money immediately and want to submit a simple application without many formalities.

Borrow money from private individuals

A third option is to borrow money from a private individual; this can be a friend, family or friend. This construction is also referred to as a private loan. Because you know each other, the interest may be low. Mutual trust must, of course, be present and certainly not be ashamed.