Model contract – Loan between individuals

To make a loan between individuals you need a model contract!

Often, family or friends borrow money without even thinking about the importance of signing a contract. Although when you lend money you are convinced that at some point it will be returned, it does not always happen this way.

It is always important that the loan is registered in a loan agreement between individuals to have a document proving that the debt exists.  

You should take into account that otherwise the Treasury can qualify it as a covert donation and you could get into serious trouble. Everything must be declared before the Treasury. Do you want to know more? Continue reading so that you know all the details about it and thus avoid penalties.

What is a loan agreement between individuals?


This document is a contract that involves a transaction between natural persons. The lender is the one who lends the money and the one who receives it is known as the borrower. It is important to highlight that it can be one or several people who appear as a lender or borrower.

The loan between both parties can be free or for consideration. That is, the debtor has to pay interest. Therefore, the contract stipulates certain conditions such as the time to return the money, and if interest is charged, how much will be the percentage.

If you want to avoid inconvenience in the future, it is convenient that you use the loan contract model between individuals. In this way, you will have a written instrument that establishes who owes you the money, the amount and the conditions for reimbursement.

Do you have to pay taxes?


This type of loan is subject to the tax on capital transfers, but nothing has to be paid. However, after signing the contract, three copies will be made; one will be held by the lender, another will be taken by the borrower and the third must be submitted to the Ministry of Economy and Finance of your Autonomous Community.

The voucher must also be included where the bank transaction between accounts is reflected. Likewise, the borrower must self-liquidate the tax on capital transfers and documented legal acts by filling out the 600 models of the Tax Agency. The period established by law for the debtor is 30 days to notify the Treasury.

Take into account that this transaction is exempt from payment. But Treasury   You must be informed to verify that tax evasion has not occurred under the figure of covert donation.

Likewise, if the contract establishes that the debtor must pay interest on the loan between individuals, they must be included as earnings in the income statement.

If the loan between individuals has no interest, how do I justify it?

If the loan between individuals has no interest, how do I justify it?

By making the contract and registering it you would be proving the origin of the money. However, it will not be enough to escape paying taxes for that capital. However, if the return of that amount is not justified before the law, it would be considered a covert donation. This means the application of inheritance and donation tax.

Therefore, to justify its return you have to keep the bank movements, which justify that the money returns have been made. In this way, if you want to help a family member or friend or receive help yourself, avoid having conflicts with the Treasury.  

An important aspect that you should know is that loans between individuals are not limited only to family members. Many claims that it should only be between parents and children closing the circle. When in fact it is not like that, because you can establish this transaction with people who have no relationship with you.

What data should this contract model have?  


At the time of writing the contract, verify that it includes a series of information related to the conditions, duties, and rights of both parties. Next, we tell you what data you should have:

  • Date: Refers to the date of the signature of this contract.
  • Personal data of the lender: Full name and identity document of the person lending the money.
  • Personal data of the borrower: Full name and identity document of who receives the loan between individuals.
  • Amount: It is the exact amount of the loan.
  • Interest: In the event that the interest payment is agreed upon, it must be detailed how much the percentage will be applied to the amount borrowed. If no interest is charged, the same must be declared in the contract. Because, if you omit it, the Treasury can make the lender pay the income tax to individuals.
  • Period to repay the money: Specify the time that the debtor will have to return the loan, avoid placing unreal terms. For example, if the lender is 70 years old, the payment term will be 30 years. Also, it should be established in this document if it is possible to make an early cancellation of the financing.
  • Payment method: Detail the payment method, in other words, if it is a deposit or bank transfer. It is suggested that the cancellation be done in this way so that the money-back is recorded.
  • Non-payment clause: Establishes the actions that will be followed in case the debtor does not comply with the loan payment.

After preparing the three copies of the contract model, the parties involved must sign it in the final section and on the left edge of each sheet of the document. Also, stamp the signatures in the annexes attached to the contract.  

When drafting the loan agreement between individuals it is convenient that you include any clause that is necessary. This will allow you to take the forecasts in case any inconvenience occurs.

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