Loans to friends or relatives: opportunity or risk?

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Every month in Italy more than 800 million euros are given to friends and relatives. Is it always convenient to ask for a loan in the family or for loved ones?? What happens if we can no longer get our money back? All you need to know about loans to friends or family.

You read well. It is not a typo, but the data from a Doxa survey (December 2017) on Italian loans to family and friends . Every month to help a relative who needs money or a friend in temporary difficulty in Italy lend 800 million euros . It ranges from a few euros for a top-up telephone recharge for the purchase of a car, a medical examination, the renovation of the house.

Would you have said that we are such a generous people? On the other hand, who, being able, would refuse a loan to a friend or even more to a family member? Even for those in need of asking for a loan, at least in appearance, the benefits of addressing those we know well instead of a bank seem to be different.

Let’s try to list them? Less chance of receiving a refusal, possibility in some cases of a simple handshake, perhaps a little ‘more elasticity in case we needed a longer time to repay the debt. Perhaps, however, there is also some disadvantage : embarrassment to ask for money to those who know us, afraid to see us close the door in the face, fear of being misjudged or demanding too much compared to what can be given.

Now we try to overturn the roles and think that we are the people who are asking for money on loan. We put a hand on the heart and the other in the wallet: we accept.

And if the person to whom we lent our money can not pay off his debt? Or because of a quarrel, a rupture of relationships or else deny our loan and say you have received the money as a gift?

But what a funny thought, it will never happen to us! Yet the lawsuits of this kind are not few … When lending money to relatives and friends it seems indelicate to ask to make a written agreement, but without a private writing in case of non-return of money to recover your money becomes almost impossible . According to the Supreme Court, in fact, to prove the existence of a contract (even a mortgage between individuals) it is not enough to deliver money between the parties.

In these cases, therefore, remember to sign a written agreement: if the person who lends the money will have to give them in a year without adding anything more will be a free loan ( see an example proposed by the Cerbone & Associati ). If we recognize an interest in the money lent will be a loan for payment or interest ( see a similar facs downloadable ). If the contract does not specify this aspect, the contract is intended for consideration and the interest is that established annually for the obligations of the Ministry of Economy.

Pay attention

Even if the law does not require the writing of an agreement and says that the consent of the parties is sufficient, reread what is written a few lines above: the Supreme Court requires it. It may seem a contradiction … but that’s it! And if you have a witness? Nothing to do: for the Civil Code, contracts above € 2.58 can not be proven by witness deposition.

It is always good, moreover, that private writing for a loan between friends or relatives has a certain date . How to do? The main way is the registration of private writing at the Inland Revenue. Alternatively, a registered letter with delivery notice or an electronic signature (time stamp) can also be used.

One last thing to remember

In the case of loans to relatives or friends, you can not give or receive more than 3,000 euros in cash. Above this figure it is mandatory to make a bank transfer or to disconnect a check (see the regulation on the traceability of payments).

Now you know the pros and cons of asking for loans to a family member or friend (and those of being the family member or friend asking for a loan). If you want to know the advantages of applying for a loan to Tom Wilcher, fill out our form in complete anonymity, ask us your questions , set a free appointment in your home.