If you are going to lend money
An IOU must always be signed by the borrower. Ideally, the signature should be witnessed by one or more persons. Otherwise, the borrower may claim that it is not their signature and the lender must then prove that it is.
A bank transfer is not always sufficient evidence that you have lent money. When a loan is repaid in instalments, it must also be clearly indicated that such payment is to repay the debt in question, for example using the reference “repayment of loan”.
If the IOU does not state how the debt is to be repaid, payment shall be made when the lender requests it.
If the lender wishes to charge interest during the period of the loan, this must be stated in the IOU.
Claims for penalty interest must be made when the lender makes the first request for repayment of the debt.
A party lending money must request its repayment within ten years. If repayment of the debt has not been requested within ten years, the debt is barred by statute of limitations.
Make sure you always ask for a receipt when you repay a debt. The receipt must indicate the debt to which the repayment relates. Otherwise, repayment of the same debt may be demanded multiple times.
