Family loan – check how much you can borrow from your family.

Is the family loan an income?

Is the family loan an income?

Although the loan services sector is growing dynamically in our country, and banks and non-bank companies offer payday loans on favorable terms, the family loan is still very popular, mainly due to favorable tax regulations.

Under current law, loans do not constitute income for the taxpayer – regardless of whether it was received from a company or a private individual. Therefore, there is no need to pay income tax on this account. The tax on civil law transactions is slightly different, however, in certain cases it can be avoided.

Does a family loan have to bear interest?

Does a family loan have to bear interest?

According to the provisions of the Civil Code, the loan does not have to bear interest. In accordance with art. 720 §1 of the Civil Code, a person who takes out a loan undertakes to return the same amount of money or the same amount of items of the same grade and quality. The regulations do not impose an obligation to collect interest, although the parties may stipulate in the contract that the obligation will be payable.

In such a situation, the amount of capital interest may amount to a maximum of 10% per annum. The private loan and its special form – a loan from a family – are regulated similarly. Interest such an obligation is not obligatory.

Better loan from family in cash or in the form of a bank transfer? A safer solution will be transferring funds to a bank account, e.g. by transfer or postal order. Then it is easier to prove that the loan was actually granted and for what amount.

Is the family loan taxable?

Is the family loan taxable?

Pursuant to applicable regulations, private loans are taxed with a tax on civil law transactions, which amounts to 2% of the amount. How does the law regulate this issue in the case of a family loan? Tax only people who have borrowed more than USD 9,637 will pay the loan.

However, the legislator provided for several conditions that must be met in order not to bear these burdens. So what does the issue of family loans and PCC tax look like ?

In what situations will the family loan be tax-free?

In what situations will the family loan be tax-free?

We will not pay tax on civil law transactions when the loan comes from the closest persons who fall within the so-called And the tax group. According to the regulations, it includes:

  • spouse,
  • descendants,
  • ascendants,
  • stepson,
  • son in law,
  • daughter in law,
  • siblings,
  • stepfather,
  • stepmother,
  • in-laws.

A family loan without tax may be granted once every 5 years – if another one occurs during this period, it will be necessary to pay the tax to the Tax Office.

When does a family loan become a donation?

When does a family loan become a donation?

A donation is an agreement in which the donor undertakes to provide a free benefit to the recipient at the expense of his property. A donation differs from a family loan in that it does not have to be repaid – it is non-returnable. Of course, there may be a situation where the loan will become a donation.

In this situation, a tax exemption is also possible – it will apply to a group of people belonging to the first tax group, except for the mother-in-law, son-in-law and daughter-in-law. The tax-free amount for donations is the same as for a family loan – USD 9,637.

Family loan and tax office

Are you wondering what formalities are associated with a family loan? Do you have to report to the tax authority the fact of receiving this type of financial support from close relatives? It turns out that with amounts lower than USD 9,637 you will not need to submit a loan to the tax office.

What about the situation where the loan amounts to higher amounts? In this case too, taxation can be avoided. It is enough to meet two conditions:

  • document the receipt of the loan, e.g. by confirming a transfer to a bank account,
  • within 14 days of the conclusion of the contract, submit a PCC3 declaration to the competent tax authority regarding the tax on civil law transactions.

Completing these formalities releases us from paying PCC tax even for higher amounts. The exceptions are loans granted between in-laws, son-in-law and daughter-in-law. Here, after exceeding the limit, you will be required to pay 2% tax.

As you can see, the regulations related to the loan from the family and the tax office vary depending on the amounts and the degree of relationship.

Formalities for family tax

Formalities for family tax

How to document a family loan – contract

When borrowing money to immediate family members, we usually do not think about formalities, repayment time and other details of the obligation – most often we simply transfer funds to the account. Such action is not completely safe, so it is worth taking care of some type of collateral for the family loan.

How to document the fact of granting this type of commitment? It’s best to think about writing a contract. According to the Civil Code, the loan agreement, the value of which exceeds one thousand zlotys, requires a documentary form. A family loan agreement concluded in writing will allow you to avoid many misunderstandings in the future, e.g. regarding repayment dates.

What elements should a family loan contract contain?

The loan agreement allows you to prove disputed issues and can provide evidence in court. The document should contain the following information:

  • date and place of conclusion,
  • lender and borrower details,
  • loan amount,
  • the method and date of the loan (by bank transfer or postal order),
  • return date
  • degree of relationship between the parties,
  • the amount of interest if the loan is payable.

The loan agreement should be drawn up in two identical copies and signed by both parties – the lender and the borrower.

Tax on civil law transactions (PCC-3) with a loan from a family

How do you complete the PCC-3 declaration with a family loan?

As we mentioned, if the amount of the liability exceeds USD 9,637, in order to avoid taxation, you should submit the PCC-3 declaration (with a family loan). How to complete the document so that the action was carried out correctly?

First, fill in the data of the submitting persons – enter the NIP or PESEL number. In field 4 specify the date of the action, i.e. the granting of the loan.

The declaration consists of 4 parts:

  • Part A – in box 5 we provide the relevant Tax Office, in 6 – whether the purpose is to make a declaration or to make a correction.
  • Part B – in box 7 mark box 5, if there is one person on the obligated person’s side, and 1 – more than one person. In the next sections of Part B enter the data of the entity submitting the declaration.
  • Part C – concerns the subject of taxation and the content of civil law transactions. In field 21, indicate respectively whether the subject of taxation of the contract, its amendment or court ruling. Then we choose the place where property rights are exercised and legal actions are carried out – inside or outside the territory of the Republic of Poland. In field 24 we describe what the civil law action was about.
  • Part D – choose the type of activity – loan agreement, enter the tax base in field 32, and the tax rate – 2% in 36. Enter the tax due in field 46.

Where to submit the PCC-3 declaration on a family loan?

The PCC-3 form on a family loan should be delivered to the Tax Office competent for the entity submitting the declaration. This can be done in person or by post.

When do you have to pay tax on your family loan?

The PCC-3 declaration must be submitted to the office within 14 days from the date of the civil law transaction.

What is the risk of failure to submit PCC-3?

An undeclared family loan has serious consequences. If we do not complete the formalities, we will have to pay as much as 20% of the loan amount.

Family loan and PIT

Family loan and PIT

Are you wondering how a family loan affects PIT – income tax? It should be paid when there is a basis for income settlement. This happens when there is an interest-bearing liability on which the lender receives interest. PIT tax with a loan from a family must be settled independently.

Repayment of a loan from a family

Repayment of a loan from a family

The family loan is not always repaid on time. If we want to recover the borrowed funds, we can take legal action. After obtaining a favorable court decision, the bailiff will recover the claim. We may also decide to sell the liability to a debt collection company or enter into a settlement pursuant to which we will set new repayment terms.

A loan from a family for housing purposes

A loan from a family for housing purposes

Funds received from loved ones through a loan can be used for a variety of purposes, e.g. the purchase of your dream property. A family loan for housing is now a very popular option. Close support is also in a different way, eg. By providing loans from family on the mortgage.

In such a situation, the borrowed money can be, for example, own contribution or be used to pay notary services or to pay PCC tax on the purchase of real estate on the secondary market. If we meet the requirements for documenting the fact of receipt of funds and submit an appropriate declaration to the Tax Office, then the loan from the family for the purchase of an apartment will not be taxed.

A business loan for a family

Funds received through loans from close relatives can also be used to grow your business. This happens in the case of entrepreneurs who are not creditworthy and cannot get a loan from a bank. In such a situation, it is also worth using an alternative solution, e.g. payday loans for companies.

93,000 Dollar credit for self-employed – from 938 Dollar rate

If the self- employed need a 93,000 USD loan for the self-employed , some hurdles must be overcome . Unlike an employee, the self-employed do not have a secure and regular income.

As a result, banks have no long-term plan security and often reject the loan for self-employed people at 93,000 USD. Nevertheless, there is also a loan for the self-employed.

Loan for self-employed 93,000 USD – how it works

Loan for self-employed 93,000 USD - how it works

The house bank is often the right contact for a loan for the self-employed. She has known the customer for years and has supported him financially in his entrepreneurial activities. At least it should be worth trying to ask for a 93,000 USD loan for self-employed people.

The bank knows the economic situation of the customer and knows how his payment behavior is arranged. Nevertheless, no matter what the offer at the house bank looks like, he should look around at the many online banks. Experience has shown that they have better conditions anyway. Here, however, the loan comparison should also be carried out beforehand.

What can you see from these few loan offers?

What can you see from these few loan offers?

These few examples clearly show how the interest rate and the term affect the credit rate. So if you want a cheap loan for self-employed 93,000 USD, you should carry out a loan comparison. The credit comparison from Centi loan is free and non-binding. A loan comparison can also be used to find the providers who provide a 93,000 USD loan for the self-employed. In addition, conditions such as free special repayments and installment breaks can be experienced.

With a corresponding term, the credit rate can be higher or lower. In general, credit rates should always be adjusted to income. Especially with the self-employed, it is the case that he cannot earn money in the event of illness. Appropriate precautions should be taken here. Think of residual debt insurance, which then covers a credit default.

What documents must self-employed persons present?

What documents must self-employed persons present?

Before a loan is granted to self-employed persons of $ 93,000, the bank naturally checks whether a loan can be paid. Employees simply present their pay slips and bank statements to prove their creditworthiness. However, the self-employed cannot. Then the evidence for a 93,000 USD loan for the self-employed looks like this: income tax assessments from recent years, a business analysis (BWA), a profit and loss account. A business plan is often required, or even business contacts or orders.

Because banks have a higher level of auditing, many lenders are already refusing the 93,000 USD loan for self-employed persons. In addition, many self-employed people have to expect an increased interest rate. The bank thus hedges a default risk. If you want to be successful with your loan, you should prepare meticulously for the loan request. Above all, this includes carefully compiling the necessary documents so that no additional claims arise.

93,000 USD loan for self-employed – increasing opportunities

93,000 USD loan for self-employed - increasing opportunities

For many lenders, the income of the self-employed is not enough. They require additional loan collateral. For example, a loan for self-employed persons is valued at USD 93,000 if, for example, a second borrower or a guarantor can be named. However, these people must have a sufficient and above all a regular income. The best way is from a permanent position.

In addition, these people must be made aware of the risks of signing a loan agreement. For example, a guarantor’s credit rating may deteriorate because the guarantee is entered in his Credit bureau file. If he needs a loan himself, the guarantee will be added to his debit. Loanable insurance or savings or retirement provisions can be presented as credit security.

What about a bad Credit bureau?

What about a bad Credit bureau?

Since these Credit bureau-free loans are secured by a work income, the self-employed do not fall into the job profile of the foreign bank. Only those who have a permanent position that has existed for at least six months will receive a loan. In addition, the income must be regular and above the garnishment exemption limit.

Since these requirements do not apply, a Credit bureau-free 93,000 USD loan for self-employed will not be achieved. As far as is known, these banks do not accept a German guarantee, only a second borrower. But then you can also apply for a loan in Germany, which is also cheaper.

76,000 dollars for self-employed – now from 766 dollar

A 76,000 dollar loan for the self-employed is a wish that many banks are happy to meet. However, the prerequisite for this is that the self-employed present themselves optimally. This includes a good credit rating, which ensures the repayment of the borrowed money.

What are the requirements?

What are the requirements?

The self-employed must be able to show their creditworthiness before they can take out a loan for the self-employed 76,000 USD. This is not always that easy. Because, unlike permanent borrowers, they do not have a payslip stating their salary. They have to present their income and the surplus generated with the help of a BWA.

For the 76,000 dollar loan for the self-employed, various documents must therefore be collected, all of which show that repayment of the loan is possible at any time. Only if this happens will the bank examine the application for a loan for the self-employed 76,000 USD and, in the best case, also approve it.

What loan offers are there?

What loan offers are there?

We have attached a credit calculator to this post, which will help you find a suitable 76,000 dollar loan for the self-employed. The loan calculator works quite simply. You only have to enter information about the amount of the loan and the term. On top of that, it has to be stated that the loan should be used for commercial purposes. In this way, precisely those loans can be selected that are perfectly tailored to the borrower and his project.

A particularly good offer comes from best bank, for example. It provides the self-employed with a loan of 76,000 USD at a monthly rate of 766.53 USD. The term would be 120 months (10 years). The effective interest rate for this offer is 3.99 percent. However, since this is variable, the borrower must have a very good credit rating in order to benefit from the offer. According to best bank, 2/3 of all customers take advantage of the offer with an effective interest rate of 4.99 percent.

A slightly higher interest rate awaits the prospective borrower with a 76,000 dollar loan for the self-employed via that of better credit bank. Under the name “extra credit”, it provides a very good loan offer for a loan for the self-employed, despite all of this. With an effective interest rate of 9.95 percent and a monthly installment of 984.38 USD, the loan would also be repaid to the bank within 120 months.

What does the General Civil Service Bank offer?

What does the General Civil Service Bank offer?

The Good Bank also has a 76,000 dollar loan for the self-employed. At first glance, the banking house may only be aimed at civil servants and civil servants. But a second look shows that the self-employed and freelancers can also benefit from the loan offers.

The loan for the self-employed is available from the Good Bank at a fixed interest rate of 5.95 percent. With a term of 120 months, the monthly rate would be 835.90 USD. The effective interest rate is not dependent on creditworthiness. However, this does not automatically mean that a good credit rating is not required. It just doesn’t change, so good credit planning can be done in advance.

Adjustment date for the building loan – so you benefit from it

At first glance, home finance is a loan like any other form of finance. However, various framework conditions make the house loan special.

On the one hand, this includes the form of collateral.

On the other hand, this is often only repaid after 15 to 20 years.

It is not uncommon for the repayment to take even longer. Therefore, the adaptation date is approaching at some point.

What is the construction loan behind?
How do builders benefit from the adjustment date?

Fixed interest rates vs. Term – when new conditions threaten

Fixed interest rates vs. Term - when new conditions threaten

With regard to home loans, sums of more than 200,000 USD are often sufficient today. Even a fixed term of 15 years is often not enough for a complete repayment of the financing.

Therefore, the term and the period over which the agreed building rates are to apply are rarely the same for building money. If the fixed conditions expire and there is still a residual debt in the room, the adjustment date threatens.

Ultimately, this is only the point in time from which new conditions should apply to a home loan. The banks inform the builders about the adjustment date and submit a new offer. The borrower can accept this – or use it to search for an alternative. This means there is no prolongation, but rather debt restructuring.

  • Homeowners do not have to wait for the timing of the adjustment. As soon as a house loan has expired for ten years, it can be terminated by the borrower on the basis of Section 489 BGB.

Adjustment date for the variable loan

Adjustment date for the variable loan

In addition to fixed-rate finance, some households also use variable-rate real estate finance.

The idea: if the interest rate drops, the building loan becomes cheaper. However, this is generally not a floating rate financing.

Banks usually work with an index value at this point – for example the Reference rate bank. Loan and reference interest rates are checked at regular intervals and adjusted if necessary. If the reference interest rate has increased, the option of the variable loan becomes expensive from the perspective of the building owner.

It is therefore generally necessary to check to what extent:

  • Special repayments
  • Debt rescheduling or
  • Converting to a fixed rate loan

count.

  • Unlike in the context of construction financing with a fixed interest rate, the builder can repay the loan at any time with a variable interest rate or cancel it with the notice period.