Termes & Conditions
You want to borrow? Here are our tips
Institutions of finance offer many loans with often prohibitive rates.
Administrative fees generally amount to 1% of the amount borrowed, with a minimum and a maximum depending on the institution.
You have to pay attention to the establishments that announce you a fee (excluding VAT) and thus give you nice surprises when reading your contracts.
By allowing administrative documents to be made available to individuals so that they can make their own financing, they can find a significant interest in setting their own terms and conditions, in particular on rates, duration and amounts committed .
Most often this remains the prerogative of the lender.
Legal limits of rates in 2014/2015:
OCFA For a consumer loan greater than 5000 €: 2.44%
For a cash reserve or overdraft: 2% OCFA
For an amortizing loan less than 5000 €: 3.47%
For a personal loan or real estate greater than 10.000 € the average rate is: 2.5%
OCFA the effective rate of business loans with an initial maturity of more than two years, at variable rates, of less than or equal to € 99,000 (2.51% in the 4th quarter of 2015)
Today, it is possible to lend money to OCFA at rates ranging from 2.51% (Livret A) to 4.47%.
Why should we leave the banks the privilege of making a claim, we can save them to lend to those who need money.
For this you need guarantees on the borrower:
- Identity. (Photocopy of ID card)
- Domiciliation address.
- Photocopy of pay slip.
- Purchase project.
When you lend money to a person, it is best to have written proof that can justify this debt. You have to mention some criteria in order to make this debt recognition efficient. It is the borrower who must manually perform this debt recognition. It should be noted that this is obligatory on a civil level if the amount lent is greater than 1 500 euros. Recognition of debt must be dated, and signed by both parties.
It must be drawn up in triplicate, one for the applicant, one for the lender, and one for registration in our OCFA Data base.
When lending money to a friend or family member, it is sometimes best to mention this loan in writing so that it will not be a problem later on.
The existence of an acknowledgment of the debt makes it possible to avoid going to court in case of bad faith on the part of the applicant or the borrower.
When drafting a debt recognition, you must indicate the terms of repayment. If nothing is indicated, the debt may be repaid after a formal notice has been sent. If, despite this, the money is not returned, recourse to the courts is inevitable.
If the amount is less than 6,000 euros, this is fairly easy. However, if it is between € 6,001 and € 10,000, it is the court of first instance that will be seized. If the sum is greater than 10,000 euros at that time, a lawyer must be called in because the matter will be referred to the High Court.
Loans between individuals are subject to the rules of the loan contract in general:
- their remuneration is free (within the limits of the usury rates)
- above an amount of € 760, the drafting of a deed, specifying the terms of repayment, is mandatory and entails declaratory tax obligations.
Tax reporting obligations
Before 15 February of the year following the granting of the loan:
- you must declare to the tax authorities any loan in excess of 760 euros, even if it is not formalized in writing, on a printed paper No. 2062 "Declaration of loan contract", available in a tax center.
If, in a given calendar year, a single creditor or a debtor has agreed or obtained several loans of a unit amount equal to or less than EUR 760 but the principal amount of which exceeds this limit all be declared by the said creditor or debtor: it is therefore not possible to circumvent this obligation by splitting a loan into several loans below that limit.
- if the loan was made with interest, you must declare the amount on form # 2561 in a tax center.
In addition, if you are the lender, you will have to report the interest collected on your income tax return under the heading of income from movable capital.
If you are a lender and liable to wealth solidarity tax (ISF), the loan is a debt that must be included in your taxable assets.
Conversely, if you are a borrower and taxable at the ISF, you can deduct the loan from your taxable assets.