In normal circumstances you would apply for a loan from a bank. They have a lot of money and a good timetable to give you the necessary resources. But sometimes you prefer not to go to a bank, but to an acquaintance, friend or family member with whom you want to borrow money. That is possible and that is called a private loan. It is, of course, important to make clear agreements so that each party knows where he / she stands.
Pay your loan to avoid blacklisted
The reason not to borrow from a bank may be because you are blacklisted. Then no bank wants to give you another loan. You will be blacklisted if you have had problems paying back a loan. Then you will be included on that list until the problems are over. But that can often take a while and in some cases you still need a loan. For example, to buy a home, but also for small electrical appliances for your home. Then you can talk to someone you know well and ask if that person wants to give you a private loan. If he agrees then you can prepare the documents.
It does not mean, of course, because you do not work through a bank that you do not have to prepare documents. It is important to note everything down and make clear agreements. That way you know how you can repay everything and the borrower is sure that everything is on paper. A cost percentage can also be agreed, which you must repay each month on top of the capital. That way the borrower has something extra in its place, which he has to give the money to you in one go. And that is a risk in itself.
Having a financial problem? Loan privately
You can also agree on a different duration than that possible at banks. If you want to pay longer or shorter, then it is possible to agree among themselves without anyone imposing rules. You must also state this properly on the contract that you must draw up between yourself. If you lend money to someone through a private loan, then this is often to people with financial problems. They cannot borrow money from a bank, so they have to go somewhere else. Check carefully whether you will actually see your money again. It is a risk that you have to bear. If problems arise then you often have to go to court and that is an endless street. So make sure you know what you are starting to prevent problems.
Always ensure that everything is well described in the document and that both parties agree. That way you know exactly what has to be done for each party. This is an important step in making a private loan.