The Federal Notary Chamber explained how to lend money correctly

Naturally, first of all, the loan must be formalized legally. It is best to do this through a notary. Oral agreements mean little in legal terms. An ordinary contract also does not provide any special guarantees: it is easy to recognize it as invalid. But any notarial act has increased evidentiary force.

Legal trends: acquaintances, friends and even relatives resort to a notarized loan agreement. For example, a man lent his friend 3 million rubles so that he could pay off the mortgage before the divorce and calmly share the apartment with his ex-wife.

Another story: a woman lent several million rubles to her son-in-law to develop his business. She did not charge him any interest, but provided for sanctions for non-repayment.

It is important to remember that the interest received is considered a material benefit and income tax must be paid on this amount, — the FNP emphasizes. — If the parties have agreed on an interest-free loan, this should definitely be recorded. Since in certain cases, if the loan agreement does not say anything about it, interest should be charged at the Central Bank rate.

It is inappropriate to indicate too high, usurious interest rates, notaries emphasize. If the transaction is initially enslaving, the notary will not certify it. If citizens have entered into a simple written agreement, setting in it a rate significantly higher than the market and too burdensome for the debtor, the court may, by its own decision, reduce it.

The contract must also specify the method and procedure for repaying the principal debt and interest — in parts or in full.— the notary continues. — You can set a schedule. It is worth paying special attention to the borrower’s responsibility in case he does not return the money within the agreed time frame. That is, to prescribe fines, penalties, forfeits.

If the person who lent the money decides to forgive the borrower’s debt, this can be done through a deed of gift. The debt can also be closed by an agreement on the transfer of property as compensation.

There is also a legal innovation: obligations under a loan agreement can be replaced with obligations under another agreement. Simply put, to work off the debt. For example, instead of repaying the debt, the borrower must do repairs for the creditor, dig up the garden, or something else. So, when the debtor has no money, but has golden hands, the parties may well come to an agreement.

Some people think that a loan agreement is an excessive measure and a receipt is enough. Others, on the contrary, think that a receipt is an unnecessary piece of paper and all questions are closed by a loan agreement. In fact, both are needed.

The contract specifies the amount, term, method of repayment of the debt and other essential conditions, but in itself it, as a rule, does not confirm that the money was actually transferred to the borrower. And until this happens, the contract, in essence, is not valid. The fact of receiving money, especially if it is cash, is confirmed by a receipt. However, a receipt alone is also not enough, since it often does not indicate the conditions under which the money is borrowed.

One of the reasons for a loan agreement is a lack of funds, for example, to buy a car, equipment or real estate. Then buyers can sort of borrow from the seller. A real-life example: a seller and a buyer of an apartment contacted a notary. The second was about a million rubles short of the full payment. They did not want to formalize a purchase and sale agreement with an installment plan so that there would be no encumbrances on the apartment. Therefore, they transferred the debt under the transaction to the format of a loan agreement. The law allows this.

In practice, some companies certify loan agreements with their employees at notaries — when they lend them money without interest to buy housing. There are also simpler motives. For example, people came to the notary to sign a loan agreement to buy an expensive pedigree dog. Not everyone knows that if a person asks for money for a specific purpose — be it real estate or a pet — a condition can be written into the agreement obliging him to confirm that the funds were spent specifically on this.

Most often, people lend money to each other, but the subject of a loan agreement can be materials, raw materials, securities, various things defined by generic characteristics. The latter is something that can easily be replaced by a homogeneous product. For example, grain, gold of a certain standard, and the like.— experts say.

There are categories of citizens who cannot enter into a loan agreement. For example, bankrupts and incapacitated persons. The notary will definitely check these nuances, experts emphasize.

The correct algorithm is as follows: certify the loan agreement, transfer the money and take a receipt for its receipt. A notary can certify the authenticity of the borrower’s signature on the receipt. It is best to transfer money in non-cash form so that the movement of funds is visible. And take a bank statement as an additional argument. Better right away, because if the loan is issued for a long term, the bank may not save the primary documents by the time you need them.

A common but incorrect practice is to first give money and then draw up documents. Sometimes one creditor comes to the notary and asks to certify a receipt from a debtor who has already stopped repaying the debt. This, of course, cannot be done.

source: Rossiyskaya Gazeta (author: Vladislav Kulikov)