In Glasgow, a peer-to-peer loan follows Scots contract law, is recovered through the sheriff court and, in case of fraud, is reported to Police Scotland on 101, while P2P platforms fall under the FCA as they do elsewhere in the United Kingdom.
Scots law, separate from English law
Scotland keeps its own legal system, rooted in civil law. A loan between two Glasgow residents is governed by the Scots law of obligations, even though the FCA and the taxation of interest remain common to the whole United Kingdom and its national framework.
Proving a loan before a Scottish court
In Scotland, proving a loan requires no particular form, but a signed document remains the best protection. A dated agreement stating the amount, instalments and Scots law can build on our template contract between individuals, adapted with a Scottish solicitor.
Five years to act: Scottish prescription
Under the Prescription and Limitation (Scotland) Act 1973, most contractual debts are extinguished after five years, compared with six in England. A Glasgow lender who lets an unpaid debt drag on therefore risks losing all recourse sooner.
Simple procedure at Glasgow Sheriff Court
For a small claim, the lender raises a simple procedure action at the sheriff court, designed to be used without a lawyer. Above its ceiling, ordinary procedure applies. The Scottish Courts and Tribunals Service publishes the forms and applicable fees.
Standard security: the Scottish property guarantee
Lending against a flat in Partick or Shawlands requires a standard security registered in the Land Register kept by Registers of Scotland. Drafted by a solicitor, this security differs from the English registered charge and involves registration fees.
Glasgow and Strathclyde students in the firing line
With the University of Glasgow, the University of Strathclyde and Glasgow Caledonian University, the city hosts a large and often international student population. Instant loan offers and paid requests to lend out your bank account particularly target this group.
Loan sharks and Trading Standards Scotland
Glasgow long suffered from illegal lenders in some neighbourhoods. In Scotland, the Scottish Illegal Money Lending Unit, part of Trading Standards Scotland, investigates these loan sharks and supports victims, who can give evidence in confidence.
Reporting fraud from Glasgow: call 101
Report Fraud does not cover Scotland: a Glasgow resident targeted by a fake lender calls Police Scotland on 101, or 999 in an emergency. They warn their bank straight away and follow our guide to reporting a loan scam.
Credit unions, a strong Scottish tradition
Scotland has many credit unions, authorised cooperatives that lend to their members at rates capped by law. For a Glasgow resident shut out of bank credit, joining one is often safer than dealing with a lender found online.
A Scottish lender’s interest and HMRC
The income tax rates specific to Scotland do not apply to savings income: interest from a private loan follows UK-wide HMRC rules, including the Personal Savings Allowance. The precise position is worth confirming with a tax adviser.
Advice Direct Scotland and Citizens Advice Scotland
Glaswegians in debt can get free help from Citizens Advice Scotland, Advice Direct Scotland or StepChange. With several debts, they will also look at specifically Scottish solutions, such as the Debt Arrangement Scheme, before taking any new private loan.
Fake notaries and bogus Scottish solicitors
Some fraudsters pose as Glasgow solicitors and demand registration fees before releasing the loan. The Law Society of Scotland keeps a directory of practitioners, and the scheme is described in our feature on the fake notary scam.
Lending or borrowing safely in Glasgow
- Draw up a written loan agreement governed by Scots law, signed and dated by lender and borrower.
- Check any solicitor involved in the Law Society of Scotland directory before sending them money.
- Pay the money by bank transfer in pounds sterling and keep the matching statement.
- Set a repayment schedule and chase any missed payment in writing well before the five-year prescription period ends.
- Check any platform or company offering a loan on the FCA Register and Warning List.
- In case of fraud, call Police Scotland on 101 and your bank, then keep all the evidence.
Indicative costs of a private loan in Glasgow
| Item | Order of magnitude (GBP) | Detail |
|---|---|---|
| Interest between individuals | Free rate, no general usury cap | Specific caps only for authorised lenders |
| Loan from a Scottish credit union | Rate capped by law | Membership usually required first |
| Standard security with Registers of Scotland | Registration fees and solicitor’s fees | Only for a property guarantee |
| Simple procedure at the sheriff court | Filing fee depending on the amount | Scottish Courts and Tribunals Service scale |
| Advance paid to a fake solicitor | Total loss is common | Report to Police Scotland at once |
Useful documents for a loan in Glasgow
- Photo ID for both parties
- Proof of address (Glasgow City Council council tax bill)
- Written loan agreement governed by Scots law
- Proof of transfer and repayment statements
- Dated reminder letters in case of late payment
- Solicitor’s contact details checked with the Law Society of Scotland
Mistakes to avoid in Glasgow
- Reporting fraud to Report Fraud from Glasgow instead of calling Police Scotland on 101, which delays the response.
- Letting five years go by without chasing a borrower, risking the debt being prescribed under Scots law.
- Paying registration fees to a so-called Glasgow solicitor who cannot be found in the Law Society of Scotland directory.
- Borrowing from a neighbourhood lender who keeps your bank card, typical behaviour of a loan shark.
- Using an English contract template without adapting it to Scots law and the Scottish courts.
Private loans in Glasgow: your questions answered
Does English law apply to a loan made in Glasgow?
No, unless the parties choose otherwise. A loan between two Glasgow residents is in principle governed by Scots law, with its own rules on evidence, prescription and procedure. FCA financial regulation and tax on interest, however, remain UK-wide.
How long does a Glasgow lender have to claim their money back?
As a general rule, five years from the date the debt becomes due, under the Scottish Act of 1973. A written acknowledgement of the debt or a part payment can change this calculation. A Scottish solicitor will confirm the deadline in your case.
Where can a Glasgow student get advice before borrowing?
The student support services of each university, Citizens Advice Scotland and Advice Direct Scotland give free advice. A credit union may also offer a small regulated loan. Be wary of offers received on social media promising a payout with no checks at all.
What should you do about a loan shark in Glasgow?
If you are threatened, call 999; otherwise contact Police Scotland on 101 or the Scottish Illegal Money Lending Unit at Trading Standards Scotland. Keep messages and proof of payment, and ask an adviser whether the debt really has to be repaid.