In cases of financial bottlenecks, you have the option – depending on your personal requirements – to take out a private loan or a personal loan. But what exactly is a loan contract and how can it be booked as part of the income tax? In the following we deal with the most classic questions about this interesting topic.
What is a private loan?
If you need a loan, you don’t have to rely on a bank. You may know someone from your circle of acquaintances who has money available and who wants to invest that. Even a friend or family member, but a person you are new to, can choose to grant you a private loan. In any case, the lender is a person who has a certain amount of capital at his disposal.
You, the borrower, can approach that person and – if both parties agree – specify what the conditions for the loan look like by means of a contract. Such a loan contract should under no circumstances be considered negligent. Both smaller and larger sums of money should always be secured. The loan agreement forms the basis for both sides.
The special thing about a private loan is that you can often negotiate with the lender about the repayment better than with a bank. With a banking institute, there is often a little leeway here, but there are often limits much earlier. If it is a friend, you can decide together how exactly the repayment should take place. A big plus, because you can coordinate individually.
Who does the private loan go to – what should be considered?
There are different parties that can avail a private loan. However, depending on the case, the conditions also change:
Loans from private to a GmbH
A private loan to a GmbH is usually not a classic private loan. Commercial purposes are involved and this means that you can usually call yourself a partner from now on. However, the area of use of the money is also relevant, because if it is not clear in advance what will happen to the corresponding amount, it may not be possible to get a loan. It would be similar if you as a private person took out a loan from a bank in order to pass it on to a GmbH.
Basically, the repayment conditions are extremely important also in connection with a GmbH. If the GmbH does not make a profit and therefore goes bankrupt, you as a private person should still be able to be sure of getting your money back.
Private loans to relatives
If you want to lend some (or a little more) money to a relative, the “trust” factor is paramount. A credit check as a basic requirement has often shaken family peace here. The corresponding loan contract can be designed individually. A catalog of criteria, as a bank often uses it, is rarely used here.
However, please note that you will have to find a solution yourself in the event of a dispute. Notice periods and the information on the term of course also belong in the contract.
Personal loan to an association
If you give a private loan to an association, the rules are a little different. First of all, the association is liable as a legal person, should any debts be incurred. However, should the association fall behind in payment, the association is no longer liable, but the board, because in the end it is responsible for the money. This is a peculiarity and you should inform yourself in advance about what should be considered in the event of a dispute. Attention: the details presented apply to a registered association. If the association is not registered, all club members are liable.
Personal loan to children
Depending on the loan amount, there are generally no problems between and parents and children with regard to a loan granted. However, attention should always be paid to interest rates. Interest is usually kept very low on one’s own children. Special tax allowances are available at the tax office. These are 400,000 dollars for your own child. For friends, this allowance is only 20,000 dollars. If the interest rate is not higher than three percent, the tax office generally assumes a gift. This should also be in your focus.
Special features of the contract
The Internet offers several loan model contracts for free download. Basically, these contain the address data of the lender and borrower, as well as the loan amount and the term. All further details on the repayment, an extraordinary termination and the interest are also included. Since it is a sample, you can determine to what extent you adapt such a contract for your own needs.
The repayment can be recorded in the form of an installment payment, for example. An ultimatum for the complete repayment of the personal loan can also be entered easily. You can largely enter and determine the interest rate yourself, although you must adhere to certain guidelines. This also includes the periods in which the interest should be calculated. You decide this yourself. There is also a limitation period for a personal loan. This is three years.
A model contract contains both obligations and rights for the lender and the borrower. This ensures that the money is made available and paid back at the agreed time. Further protection for the lender can be based on a land charge or a land register entry. A notary is required for this.