A reliable private loan agreement clearly identifies lender and borrower, states the amount in figures and in words, sets the rate in writing below the usury threshold, includes a precise schedule and never demands fees before the money is paid.
Full identity of the lender and the borrower
Service public, the official French portal, recommends stating the names, addresses, dates and places of birth of both parties. A document where the lender appears only under a first name, a free email address or a WhatsApp number gives you no protection in a dispute.
The amount written in figures and in full words
Article 1376 of the French Civil Code requires a deed in which one party alone undertakes to pay to state the sum in figures and in words, written by the person committing. If the two differ, the amount in words prevails.
A written contract is essential above 1 500 euros
Article 1359 of the Civil Code requires written proof for any deed involving more than 1 500 euros. Below that, a written document is still advisable, because it stops a loan from being presented as a gift in a dispute or an inheritance.
The interest rate set out in black and white
The Civil Code requires the agreed rate to be fixed in writing; interest agreed only verbally cannot be claimed. The rate must not exceed the usury threshold published each quarter by the Banque de France for the relevant category of loan.
Schedule, repayment date and late payments
Check the date and amount of each instalment, the payment method and the consequences of being late. A clearly excessive penalty clause can be reduced by a judge, and repayment with no precise date becomes awkward for the lender to claim.
Suspicious clauses that expose a fake contract
A document demanding release insurance, notary fees payable by prepaid voucher or a transfer to a third country before the money arrives signals a scam. Our page to spot a fraudulent lender shows further examples of trap clauses.
Copied official logos and stamps
Fake contracts often display the logo of the Banque de France, the European Union or a court, with a scanned stamp and signature. No public authority approves a loan between individuals, so these emblems should alert you straight away.
Private agreement or notarised deed
A privately signed agreement is usually enough. A notarised deed costs more but is directly enforceable, letting the lender seize assets without a trial. A real notary can be checked in the official directory, as our page on using a notary points out.
Declaring the loan to the tax office above 5 000 euros
A loan above 5 000 euros, excluding interest, is declared on formulaire 2062 (French tax form for declaring loans) with the annual income return. Several small loans exceeding that threshold together in one year also count. See the page on tax on private loans.
Interest received and how the lender is taxed
Interest collected by the lender counts as investment income, in principle subject to the flat-rate levy. The contract should therefore state the amount to make the return easier; the tax office or a tax adviser will confirm which treatment applies.
Signed copies and proof of payment
Each party keeps an original signed and initialled on every page. The funds should be paid by bank transfer rather than in cash, so the account statement proves delivery; the contract can name the account that will receive the money lent.
Having the contract reviewed by a professional
A lawyer, a notary or a free legal clinic at the town hall or a maison de justice et du droit can review the draft. This costs little next to the sum at stake and reveals unbalanced clauses or the inconsistencies of a fake document.
Checking a loan agreement point by point
- Compare the lender's identity in the contract with an ID document seen in person or during a video call.
- Make sure the amount appears in figures and in words, with the same value in both.
- Confirm that the written rate stays below the current usury threshold published by the Banque de France.
- Read the schedule, late payment penalties and early repayment clause before signing anything.
- Reject any contract that makes payment of the funds conditional on paying fees first.
- Sign two copies, have the funds paid by transfer and complete form 2062 if the threshold is exceeded.
Costs linked to a loan agreement between individuals
| Item | Amount | Comment |
|---|---|---|
| Privately signed agreement | Free | Drafted and signed by the parties |
| Notarised deed | Regulated fees and expenses (indicative, on quotation) | Directly enforceable for the lender |
| Agreed interest rate | Free to set below the usury threshold | Threshold revised every quarter |
| Form 2062 declaration | Free | Mandatory above 5 000 euros |
| Fees demanded before payment | None in a genuine loan | Sign of an advance fee scam |
What to gather before checking the contract
- ID documents of both parties
- Draft contract or complete IOU
- Signed repayment schedule
- Borrower's RIB (bank details) for the payment
- Form 2062 if the loan exceeds 5 000 euros
- Quarterly usury threshold published by the Banque de France
- Proof of the transfer of funds
Common traps in private loan contracts
- Signing a contract emailed by a lender you have never met, whose address and civil status cannot be verified.
- Accepting an unwritten or verbally agreed rate, which cannot be claimed and will fuel a conflict later.
- Paying application, insurance or notary fees before receiving a single euro of the loan.
- Forgetting form 2062 for a family loan above 5 000 euros, which weakens your proof if the tax office audits you.
- Handing over the capital in cash without a receipt, which makes proving the loan almost impossible.
Private loan contracts: readers' common questions
Is a loan contract typed on a computer valid?
Yes. The contract can be typed, provided the sum appears in figures and in words written by the person committing, and both parties sign. A reliable electronic signature is also accepted by the Civil Code.
Do I have to go through a notary?
No. A privately signed agreement is enough for a loan between individuals. A notary provides an enforceable deed and advice, but never asks for fees by prepaid voucher or foreign transfer before the signing.
Who fills in form 2062?
According to the tax administration's guidance, it is in principle the borrower, with the annual income return. When an intermediary such as a notary drafts the deed, that intermediary declares it. If in doubt, the tax office answers free of charge.
How can I tell if a contract from a stranger is fake?
Spelling mistakes, official logos, an odd file number, a lender based abroad and fees to pay before the money arrives are strong signs. Sign nothing and pay nothing until you have sought a professional's opinion.