Over the last 25 years, we have seen many innocent clients fell into the same trap (repeatedly) of lending money to people who sometimes are never capable of paying them back.
We do hope that you seriously consider the implications of lending money. And if you really must lend money, read this article to know more about your rights before lending money.
Common questions on lending money.
Is it Legal to Lend Money to My Friend? The occasional giving of loans to family and friends is legal and do not require a license. However if you have created a system to constantly lend money freely and readily to your family members and friends, then you are conducting a money lending business. In this case you maybe acting as a unlicensed money lender. This is not allowed and is illegal.
Is it Legal to Charge Interest for Personal Loans? If you are not in the business of money lending, you can (a) lend money to a friend or family member and (b) charge interest on that loan.
The interest however has to be a reasonable to avoid legal complications (where you may be mistaken for a loan shark).
Is it illegal to Use IOU's? No! IOU is legal. In fact, we encourage you to use IOU's. It also makes your case stronger if you have an IOU. IOU simply means I owe You. It is generally a simple contract between the lender and borrower stating the loan amount, contact details of each other, expected payment date and both parties signature.
Do you have a Sample IOU? Feel free to use this Sample IOU
I lend some money to my friends but he did not sign any documents. How do I get back my money now? I lend some cash to my friend but he did not sign any documents. How to get back my money?You may want to contact a debt collection company or a debt collector. They will help you build a case and contact the debtor.