In London, a one-off peer-to-peer loan remains free, but it should be put in writing, paid in pounds by traceable transfer and checked against fake financial firms that impersonate City businesses registered with the FCA.
A metropolis where rent weighs on every budget
Facing some of the highest rents in Europe, many Londoners borrow from a relative for a deposit or a move. These family loans, described in our guide to lending in the United Kingdom, fall outside the Consumer Credit Act if they stay occasional.
French people in London: the empty credit file trap
French expats arriving in South Kensington, Clapham or Shepherd's Bush often have no history with Experian, Equifax or TransUnion. Lacking bank credit, they become targets for fake French-speaking lenders; our page on loans for expats details these situations.
The FCA, a regulator based in Stratford
The Financial Conduct Authority, headquartered in Stratford in east London, authorises P2P lending platforms and publishes a Warning List of unauthorised entities. A lender approaching Londoners without appearing on its register should be treated as suspicious.
Clone firms: impersonating City companies
Scammers copy the name, FCA number and address of real firms in the City or Canary Wharf, then supply a fake phone number. Calling back only on the number listed on the FCA Register defeats this very widespread fraud.
Drafting the loan agreement with a London solicitor
A signed loan agreement sets the amount, rate, schedule and English governing law. London solicitors charge high fees; you can start from our loan contract template and then ask for a fixed-fee review, in English and French if needed.
Security over a London flat
Lending against a property in Hackney or Croydon means registering a charge with HM Land Registry, usually through a solicitor. This formality protects the lender if the property is sold, but adds fees and delays that need costing.
UK or French tax resident: who taxes the interest?
A French national living in London normally declares interest to HMRC, whereas a lender still based in France declares it to the French tax authority. The Franco-British tax treaty allocates taxing rights; a tax adviser should confirm the exact situation.
Reporting fraud from a London borough
London victims file their report with Report Fraud, which replaced Action Fraud in December 2025, and then alert their bank. The borough's Trading Standards and the Metropolitan Police can also step in against a local loan shark.
Loan sharks in London's working-class neighbourhoods
Lending money without authorisation, with threats or confiscated documents, is a criminal offence. England's national team against illegal lenders, the Illegal Money Lending Team, supports victims, including those who have already repaid part of the debt.
Free advice: Citizens Advice and debt services
Citizens Advice offices in Westminster, Camden or Tower Hamlets see people by appointment. StepChange and MoneyHelper also provide free support on over-indebtedness, useful before accepting a private loan to pay off other debts.
Cross-border transfers from London: be careful
A lender supposedly based in London who demands a transfer to an overseas account or a payment in crypto-assets is running a classic scam. The scenario is described in our feature on the international transfer scam.
Recovering your money before a London county court
If the London borrower does not repay, the lender first sends a letter before action, then can bring a claim in the county court via Money Claim Online. Up to £10,000, the small claims track keeps the costs borne by the parties limited.
Securing a private loan in London
- Identify the borrower with a passport and proof of a London address, and check any firm on the FCA Register.
- Call the firm back only on the number listed in the official register, never on one given in an email or advert.
- Sign a loan agreement under English law setting out the amount, rate, instalments and consequences of late payment.
- Send the pounds by Faster Payments after the Confirmation of Payee check, and keep proof of the transfer.
- Track repayments in a shared spreadsheet and declare interest received to HMRC or the French tax authority.
- At the slightest doubt, report the offer to Report Fraud and ask Citizens Advice before paying anything.
Indicative budget for a private loan in London
| Item | Indicative amount (GBP) | Comment |
|---|---|---|
| Interest agreed between individuals | Free, no general legal cap | Keep it reasonable to avoid a dispute |
| Contract review by a solicitor | Variable fees, often high in London | Ask for a fixed-fee quote |
| Registering a charge with HM Land Registry | Registry and solicitor fees | Only with property security |
| Claim via Money Claim Online | Court fees depend on the amount claimed | Official scale of HM Courts and Tribunals Service |
| Advance demanded by a fake lender | Often a total loss | Ask your bank for an APP reimbursement straight away |
Documents to prepare for a London private loan
- Passport or UK residence document (settled or pre-settled status for Europeans)
- Tenancy agreement or borough council tax bill
- Recent payslips or bank statements
- Signed loan agreement with schedule
- Payee's sort code and account number
- Screenshots of exchanges if you were approached suspiciously
Typical mistakes and frauds in London
- Trusting a firm because it shows a prestigious City address: clone firms copy precisely those addresses.
- Paying an insurance deposit or arrangement fees to a lender met in a Facebook group for French expats in London.
- Lending to a flatmate with nothing in writing, then finding they have left the UK with no known address.
- Agreeing to pass money through your account for a commission: this is money mule recruitment, severely punished.
- Ignoring possible double taxation when the lender lives in France and the borrower in London, or the reverse.
Londoners' questions about private lending
Can a French expat lend to a London friend without formalities?
Yes, a one-off loan between friends needs no FCA authorisation. It is still wise to sign a written agreement, transfer the funds from a bank account and check in which country any interest must be declared, France or the United Kingdom.
How do I recognise a clone firm in London?
The firm uses the name and number of a genuinely authorised company, but gives a phone number, website or email different from those on the FCA Register. Always call back the official contact in the register and check the FCA Warning List before any payment.
Can French people in London get help in French?
The French Consulate General in London points its nationals to French-speaking lawyers and associations. For debt, Citizens Advice and StepChange work in English but often accept an interpreter. Never hand your details to a so-called adviser met online.
Which court should I go to if a London borrower does not repay?
After a written letter before action, the claim is made online via Money Claim Online and handled by the county court. For a sum under £10,000, the small claims track applies, with lower fees and mediation often offered.