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Arranging a secured loan privately with another individual?

If I could find a suitable investor could I come to an agreement with them to lend me some money? Or are there laws (FSA?) preventing this? I get the impression that there are lots of people out there who are very unhappy with their savings rates. I am quite unhappy with my borrowing rates. I think we could agree on a rate higher than their savings rate and lower than my loan rate. I have clean credit history and can secure the loan on property and presume a solicitor could draw up the agreement. I'm talking about more than the £15k Zopa limit.

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Erm, maybe I'm stating the obvious here... but if you're getting a solicitor to draw up the agreement, shouldn't he/she be able to tell you whether its legal or not?



well they would need a consumer credit license for starters... Sounds to me like you just need a contract, and without question it will be an unsecured loan.... the only good thing from a private lender, lets say a family or friend member, is you could perhaps have more than 25k and over longer than ten years... if however you are looking to pay off debt with it, then steer clear of this private individual and use appropriate methods of debt relief



[url=http://www.oft.gov.uk/shared_oft/business_leaflets/credit_licences/oft147.pdf]http://www.oft.gov.uk/shared_oft/business_leaflets/credit_licences/oft147.pdf[/url] According to the penultimate paragraph of page 4, a license would not be needed if they only made the 'occasional' loan. As you are dealing with a private individual, make absolutely sure that you can service the loan. Mike



There are also no laws that prevent individuals lending money to each other just as there are no laws that prevent individuals lending to banks, i.e. "saving". And if a private lender only occasionally lends money, then he/she is not treated as carrying on that kind of business and does not need a consumer credit licence. I wouldn't recommend it as a form of borrowing unless its with close family and even then many cases end up in dispute.