LoanBack: We make personal lending work

With nearly $1.5 billion of personal loans already formalized through loanback.com since it launched, this friend & family lending site makes the sometimes sensitive issue of legal documentation between close ones a whole lot easier. And you don’t have to visit a lawyer either.

According to the site, last year alone saw more than $57 billion lent between family and friends with most being on an informal and undocumented basis. Whilst a lot of these no doubt ended happily there is always the potential for misunderstanding which at its worse can lead to a serious relationship breakdown.

With a simple 4 step process loanback.com can provide you with a legally binding loan agreement, recognized in all 50 States, at a fraction of the cost you would pay for a lawyer to draft one.

Firstly you set out the details of the loan including the parties involved, amount, interest rate and term.  Step 2 allows you to add any additional conditions like late fees or state if any collateral is involved to secure the loan. Personal details of the two parties including full names and addresses make up step 3 before you sign up and purchase the document which can be downloaded as a PDF and printed out for signing. The agreement comes with a payment schedule and optional payment alerts.

The site allows you to keep track of your loan and you can set up reminders which trigger an email from loanback.com to the borrower.  This is a nice touch and cuts out any awkward approaches having to be made.

There are two ways to obtain a loan agreement via loanback.com with differing prices. The process described above and labelled “LoanBuilder” costs $29.95. For this you get the math done for you and all of the add-ons mentioned. For $14.95 you can visit loan forms section and purchase a word document template. You will have to fill in the details and do the math yourself using this option.

Another nice touch on this site is the personalized loan proposal function. For anyone looking to borrow money and wanting to project a serious and professional attitude about it, simply fill in the template provided and loanback will build the document for you to present to potential lenders.

Conclusion
A properly drafted loan agreement makes sense even when the transaction is between family and friends. And with the banks charging high interest on loans but paying low returns on savings this type of lending will probably only increase.