One of the first financial education standards that we should learn would be to know how to lend money with collateral .
There are different ways to lend money, knowing how to adapt to each of them will prevent us from having future problems or enmity. This guide will help you with all the tricks you should know to know how to leave money with guarantee and not suffer for it.
Lend money to friends or family
This is the first case we are going to deal with when a family member or friend comes to ask us to lend him money.
Family and friends with the theme of money is very similar to water and oil repel. Many know that because of lending money to family and friends we have lost twice: money and friendship.
For this particular case, there is no guarantee, only the friendship or closeness to these people makes our loan have the possibility of return.
When we talk about collateral and especially in loans we mean that someone or something guarantees our investment. In this case it can be another person, a vehicle, a jewel, a property, something that has a value that equals or exceeds the amount we have lent.
Whenever we make these types of loans it would be convenient to close the same with a contract (if it is before a notary better) if the amount is important, for small amounts € 100, € 500 does not compensate incurring expenses.
Another way to have collateral for which you can have a claim possibility is by means of an exchange letter signed by the borrower. In the case of default, the bill of exchange and is a very powerful document for the claim of money.
Lend money as a hobby or as a profession
Loans between individuals are in fashion, it is something that makes people cool, they get into a platform that exists in the market and they feel the same as Good Finance on Wall Street.
Loan platforms between P2P individuals in lendico Spain, offer as a guarantee a magic word “diversification”.
This word reflects that if you put 10 investments of € 50 and 2 do not pay you they will compensate with the 8 good ones that you have left. This on paper and with the numbers on the table sounds good, but on the subject of loans and people “diversification” that they promise us will not always be as safe as they want to give us to believe.
Individuals who lend money on a P2P platform as the sole objective of diversification, run the risk of obtaining occasional non-payment. I will not be the one who criticizes this type of loans, you just have to consult with a lawyer to advise you on the pros and cons of a claim of a failed personal loan.
Banks have suffered such situations and sell their failed loan portfolios to vulture funds that are responsible for claiming the debt for years.
Lend money with real guarantee (mortgage)
We have decided: we will lend money with interest . We will become that elite of lenders who return their investments 12% annually.
Among all the cast of existing websites and platforms we are going to opt for the best conditions offered with the highest possible guarantee.
To lend money safely with a legal guarantee, the most advisable thing will be for borrowers to provide real estate as collateral. It is the saying: if you do not pay me I keep your property. This sounds a bit heavy today but in reality if you lend € 30,000 to a person, do you risk losing your money completely?
Mortgage a property by lending money
When we lend money with a mortgage guarantee, we carry out what is commonly called private capital loans. We become professional lenders, we will have to be registered with the Ministry of Consumption and have a civil liability insurance that covers our responsibility.
This process is highly recommended when our activity in the subject of loans exceeds 2 annual loans, since when our activity is legalized we can register all our loans before a notary.
When a borrower offers a property as collateral, it will be affected with a mortgage charge on that property until the loan is canceled. This mortgage guarantees by mutual agreement that if the amount borrowed plus their interests is not answered, the judicial claim would go over the good that was provided as collateral, therefore in case of default the guarantee would go to the lender after a foreclosure.
Nowadays, with the anti-eviction, social exclusion and unemployment platforms, everything that is foreclosure is a very hot topic, but you must always bear in mind that when you make loans with mortgage legal guarantees, the responsibility of the person requesting the Loan falls directly to him.
People who want to lend money legally only want their money back with their agreed interests. They do not want properties, since many of them already have surplus properties. They only want to obtain higher returns than those currently receiving for their deposits.
We must reject the image of the person who lends his money to another as something dark. He is simply doing a job that banks have always done: a bank earns money when it lends it thanks to the interest it collects for it.
The provision of guarantees or not to a loan operation between individuals is an issue that depends on each individual and the amount to be invested.
For small amounts with an investment portfolio of € 1,000, a P2P platform of loans between individuals can be a good training. When the thing gets more serious and the amounts are already high, knowing how to lend money with collateral has its difficulty in analyzing the guarantees or guarantees provided.
Only with caution and analysis will we know how to lend money with guarantees and thus we will have our money safe from future problems.
I only have to highlight the difference that can exist between a foreclosure and a monitor claim of a personal loan that I will explain in more detail in another post.