Loaning People Money

Hi, I have been loaning people money 1k to 10k with a high interest rate. I'm in the USA and I've been loaning to people in the UK can I run into any legal trouble? I send them the money via paypal so I can file a complaint with paypal if they don't pay. I've had no problems out of people repaying me. What about if I loan to people in the USA? Thanks

 

Charging high interest can violate the law. Read up on usury, one of the more complicated legal topics.

 

In the UK you must be licensed to give loans and then must follow the Consumer Credit Act. Failure to be licensed makes the debt unrecoverable so if they decide not to pay they don't have to (and I doubt PayPal would rule in your favour). To offer loans when not licensed (ie being a loan shark) is also a criminal offense.

As you can see by the UK governments new site, they are looking to crack down on people who do this http://stoploansharks.direct.gov.uk/

That said, it is not overly difficult to get a license in the UK and whilst you must publish your interest rate calculated in a very particular way inc of any fees there is no limit to the rate you can charge, there are some licensed moneylenders charging 10,000% and more (because of how it legally must be calculated)

Cannot comment on the legalities of lending without a license in the USA

 

I think it is not right to do what you are following. This kind of activity is know to be an offense and you would be considered as a loan shark, if caught. http://www.kwikpayday.co.uk

 

Interest rate must be inside the law of land

 

you can loan money using prosper.com and still earn high interest rate

 

I think you need permission to do this business first and the idea is great and you can use the paypal in great way for your benefit.

 

Loan money at your own risk. Never lend money you can't afford to give away for free. Some people here do ask to borrow money as a scam.

I lent someone here a small amount of money at 0% interest and never got paid back.