Arranging a secured loan privately with another individual?

anniesdad
by anniesdad 14 May 2009  |  Comments 4 comments  |  Love Love  0 loves

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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Comments (4)

  • ThatLindseyGuy
    Love rating 114
    ThatLindseyGuy posted

    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?

    Posted on 14 May 2009 | Love Love  0 loves Report
  • rowlystravel
    Love rating 27
    rowlystravel posted

    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

    Posted on 14 May 2009 | Love Love  1 love Report
  • MikeGG1
    Love rating 909
    MikeGG1 posted

    http://www.oft.gov.uk/shared_oft/business_leaflets/credit_licences/oft147.pdf

    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

    Posted on 14 May 2009 | Love Love  1 love Report
  • peepobaby
    Love rating 49
    peepobaby posted

    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.

    Posted on 14 May 2009 | Love Love  1 love Report

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