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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10915
Experience:  Solicitor with 5+ years experience
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Hi, A close family member has offered me a short term loan

Customer Question

Hi,

A close family member has offered me a short term loan to enable me to complete a mortgage application.

My relative would like a 'personal guarantee' from me that I will pay back the loan by a given date.

The loan represents approximately 2.6% of the property price and while I don't foresee any problems paying back the loan I expect that this part ownership of the property could be written into a personal guarantee?

I would like to draft a legal document to specify the key components of the guarantee, is this something that a solicitor can help me with?

Regards,
Submitted: 2 years ago.
Category: Law
Expert:  tdlawyer replied 2 years ago.

tdlawyer :

Hello, thanks for your question.

tdlawyer :

My name is Tony.

tdlawyer :

If you're borrowing the money personally, then you don't need a personal guarantee - it wouldn't add anything as you would be personally liable to repay the money anyway. What the relative might be asking for is security over the property, like a second mortgage, which you could do, but only with the main (or first) lender's consent.

tdlawyer :

Ultimately, though, your relative is in a pretty decent position if it's a personal loan to you, as he/she could sue you personally anyway to get the money back if you default on the terms of your agreement.

JACUSTOMER-t0y914z7- :

No, my relative simply wants a legally binding document to represent the terms of the loan and the fact I have agreed to pay it back.

tdlawyer :

Oh, then yes, this is something a solicitor could draw up easily for you.

tdlawyer :

All it would need to do is refer to the loan, set out the terms of which you've agreed to (i.e. when it has to be paid back and how, and in what amounts), then you both sign it.

tdlawyer :

It's nothing too special to be honest.

tdlawyer :

You could get a high-street solicitor to do this for you probably for abour £150 plus VAT.

JACUSTOMER-t0y914z7- :

so this isn't something i could do online?

tdlawyer :

It's best not to. It's important that you both get this right, and it's useful to be able to see a solicitor in person to do it, and be able to sue somebody later if they get it wrong. You're very unlikely to be able to do that online in all honesty.

tdlawyer :

If you want to do it online - then you can, I'm onyl suggesting you dont.

tdlawyer :

Here are loan template documents: http://wikidownload.com/simple-loan-agreement-template-pdf-ms-word/

JACUSTOMER-t0y914z7- :

ok i don't think this is worth £33 though

tdlawyer :

Were you expecting me to draw up a loan agreement for you?

JACUSTOMER-t0y914z7- :

yes

tdlawyer :

For £33?

Expert:  tdlawyer replied 2 years ago.
Sorry but I can't do this, it's against the site rules, we provide information only not draw up legal documents. I'm opting out.
Expert:  Ash replied 2 years ago.
Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

I see the expert has opted out. What else would you like to know bearing mind this is a question and answer site only?

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