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Vetting loan agreement for unlicenced individual given to proprietor
28-Jun-2025 (In Recovery Law)
Whether a non relative or non friend can be given a loan? Can it considered as friendly loan?
If not then can a individual give business loan without lending licence?
And whether interest or royalty or fixed compensation can be charged on friendly or business loan by a individual lender having no licence?
Can a individual lender has the right to mortgage any movable or immovable assets of borrower?
Now another instance
Whether the money given can we show as?
1) advance given for buying any s
A non-relative can give a loan, but it may not qualify as a “friendly loan.” Charging interest without a money lending license is prohibited. Loan can be shown as advance for purchase if documented. With regards to the rest of your question the same isn’t visible wholly.
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Adv. Devang Manjrekar
Mumbai | 100+ Answers
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I have understood your concern. Legal matters require careful consideration of facts and relevant laws. Providing accurate guidance depends on understanding the complete details of the issue, which is best done through a focused and professional discussion.
Adv. Sushant Vichare
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Adv. Sushant Vichare
Navi Mumbai | 25+ Answers
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Yes, an individual can give a loan to any person, even if they are not a relative or friend. It can still be termed a friendly loan, provided it is not frequent or done as a business.
No lending license is required for occasional personal loans, but charging high interest or doing it regularly may be treated as unauthorized money lending under state laws.
Interest, royalty, or fixed return can be charged if properly documented, but it must not violate money lending laws.
An individual can take mortgage or security (movable/immovable) from the borrower through a registered agreement.
The money given can be shown as:
1. Advance for purchase of goods/property
2. Loan (friendly or business) with written terms
3. Investment, if structured properly
Always use written agreements and maintain bank transaction proof for legal validity.
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Adv. Mahrukh Khan
Mumbai | 200+ Answers
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There are certain conditions under which an individual can give a loan, even to a non-relative, but whether it qualifies as a friendly loan or a business transaction depends on the facts and purpose. Charging interest, taking security, or structuring it as compensation can raise regulatory concerns if not handled properly.
The way the transaction is shown — whether as an advance or otherwise — also needs to be aligned with supporting documents and intent.
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Adv. Nidhi Preetam Banvali
Mumbai | 25+ Answers
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Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at lawrato.com and has been responded by one of the Divorce Lawyers at lawrato.com to address the specific facts and details.
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