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Loans from family members or friends – what you need to consider
Loans from family members or friends are popular. They often offer better conditions due to the personal relationship. But this is precisely where the challenge lies. To ensure that a loan from family or friends does not end in a dispute, there are a few important points to bear in mind.
In the event of a liquidity bottleneck or an upcoming investment, family or friends are often asked for financial help first. Such loans are very common, whether to finance education and training, the renovation or furnishing of a property or the purchase of a new car. The conditions of such personal loans are often better – after all, people know each other and are on good terms. A loan from a well-known person often leaves you feeling better.
Despite the lack of regulations – written agreements are worthwhile
In addition, there are no special formal requirements for such loans. The general standards of the Swiss Code of Obligations (OR) apply. This simplifies the process of taking out a loan from family members or friends. Nevertheless, it is advisable to pay attention to a few points. So that the loan does not put a strain on the relationship with the family or friends at some point.
After all, such a loan is always associated with certain risks. Both your own professional and private situation, as well as that of the lender, can change under certain circumstances. What happens if the debtor can no longer pay the instalments or can only pay them late? What should be done if the creditor wants or needs her money back early? These and a few other questions can be regulated by contract before a loan is taken out or paid out. A written contract creates clarity and therefore security – for all parties.
Tax advantages through a written contract
A written loan agreement also enables debtors to deduct the loan interest from their income when calculating their tax bill. However, the loan interest must be documented in writing, i.e. in a contract. A verbal agreement is not sufficient here.
In addition to the loan interest, a written loan agreement can also stipulate the amount of the loan, the intended use, the repayment modalities, the duration of the agreement and other collateral.
Simple alternative: loan processing via LEND
Instead of looking for a template and drawing up the contract yourself, you can also have everything processed by us:
1. submit an application on lend.ch
2. let our team know that you already have one or more lenders (e.g. your brother)
3. LEND checks everything and takes care of all contractual matters
4. your brother invests in you
5. LEND handles everything and also prepares the tax reports for everyone
6. you and your brother can chill out
So that the loan is a positive experience for everyone involved and doesn't lead to the next dispute.
