Personal Loan Agreement

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mjdaniel
Posts: 111
Joined: Sat Jan 21, 2012 2:20 pm
Location: Temecula, CA

Personal Loan Agreement

Post by mjdaniel » Thu May 19, 2016 9:54 am

My spouse and I are going to loan some money to a relative while their house is in escrow. No interest, and the plan is to be paid back from the proceeds of the sale. I am on board with a signed agreement, just looking for the most simple form. Does anyone have any experience with a simple one page agreement? Are we going to need it to be notarized? I have seen both views on web searches, thanks in advance.

JGoneRiding
Posts: 1180
Joined: Tue Jul 15, 2014 3:26 pm

Re: Personal Loan Agreement

Post by JGoneRiding » Thu May 19, 2016 2:41 pm

There might be a problem bec the bank is going to want to know were that money came from and not going to like "we got a bridge loan from my brother" the irs too has an opinion on this.

But if you dont care about those issues a simple one page from can generally br signed and notarized. Often banks do this for free

mjdaniel
Posts: 111
Joined: Sat Jan 21, 2012 2:20 pm
Location: Temecula, CA

Re: Personal Loan Agreement

Post by mjdaniel » Thu May 19, 2016 3:32 pm

Hi JGoneRiding, what is this: a simple one page from can ? I think you left something out. Also how would anyone know they got a loan, bank or IRS? I guess by reading this the cat is out of the bag, thanks.

NMJack
Posts: 836
Joined: Sun Feb 14, 2016 1:22 pm

Re: Personal Loan Agreement

Post by NMJack » Thu May 19, 2016 4:23 pm

If you don't charge a minimal, IRS defined, interest rate; the IRS will consider the loan a gift. If you are at less than $28,000, I don't think it is an issue. Their new mortgage company may refuse to issue the mortgage if they believe that they borrowed money to make the minimally required down payment.

btw: it isn't something from a can, it is "form can...."

sk.dolcevita
Posts: 229
Joined: Sat Aug 23, 2014 11:55 am

Re: Personal Loan Agreement

Post by sk.dolcevita » Thu May 19, 2016 7:01 pm

OP,

Your friend will be required to provide up to 3 months of your bank statements. Any large deposit on those statements will be questioned. Your friend may argue it is a gift, and the bank may or may not accept that argument.

mjdaniel
Posts: 111
Joined: Sat Jan 21, 2012 2:20 pm
Location: Temecula, CA

Re: Personal Loan Agreement

Post by mjdaniel » Fri May 20, 2016 8:32 am

The people who will be borrowing are moving to a rental, so no mortgage involved.

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