Private lending refers to the conduct of financing between natural persons, legal persons, and other organizations and between them. It should be emphasized that the subjects of private lending do not include financial institutions and their branches that are established with the approval of financial regulatory authorities to engage in loan business. Institutions (such as banks).
It is very common to have financial difficulties, borrowing money from friends and relatives to maintain a living, and companies and enterprises borrowing money for capital turnover. After the loan expires, the lender’s creditor’s rights cannot be realized. With the improvement of people's legal awareness, more and more people choose the method of litigation to realize the creditor's rights. Now we will explain the key issues in the private lending litigation.
1. Real and effective loan contract relationship
Private lending falls under the jurisdiction of the "Contract Law", and the borrower and lender form a contractual relationship. How to prove in litigation that the contractual relationship between the borrower and the lender becomes the basis of private lending cases. The "Loan Contract", "IOU", "IOU", "Receipt", etc. can all prove the contractual relationship between the borrower and the lender.
2. The rights and obligations of the borrower and lender
The relationship between the borrower and the lender is a contractual relationship, so both parties have rights and obligations. The obligation of the borrower is to use the loan as agreed and repay the loan on time. And what about the obligations of the lender? Pay the money to the borrower! Therefore, the flow of receipts and bank transfers has become the most important evidence other than IOUs or loan contracts.
3. The issue of relativity between borrowers and lenders
The contractual relationship pays attention to relativity, and the legal relationship between the borrower and the lender is also relative. For example, if A acts as a lender and forms a loan relationship with B, B can ask A to pay the loan to C’s account. During the litigation, whether B receives the loan, A’s Is the obligation fulfilled? Grasp the relativity of the loan relationship so as not to affect the litigation.
4. Questions about interest
The interest of the borrower and lender shall be subject to the agreement, but shall not violate the mandatory regulations of the state. After the loan relationship is formed, starting from the day when the borrower receives the loan, the paid part cannot exceed the monthly interest of 3%, and the unpaid part cannot exceed the monthly interest of 2%. If the agreed interest is too high, the court will reduce it during the trial.
As long as there are risks and uncertainties in litigation, we must remain vigilant and handle private lending carefully, and we must not relax risk control because of high interest rates. Similarly, after a problem occurs, if it can be resolved through consultation, do not resort to judicial procedures, and be ready to go to court at all times, but do not go to court lightly.