Contract law: 'Deposit' on a loan

[Chief Seamus]

Probably a strange question.

If Someone asks me for a loan, can I ask for something upfront in return for the act of making the loan available. Is the loan valid consideration in the contract?

simple example:
A asks B for loan of €100,000
B says Yes but you must give me your car when I give you the loan.
Even if the loan is paid off over say 15 years, does B still own the car?

Any case law that anyone knows of?

 

[csirl]

Depends on what the 'contract' says. Is A giving the car as security? Or is A giving the car as the fee for the loan?

 

[Chief Seamus]

Depends on what the 'contract' says. Is A giving the car as security? Or is A giving the car as the fee for the loan?

No not as security, it would be inreturn for the act of giving the loan rather than related to the amount of the loan itself. The loan would be fully repayable.
Yes I suppose it could be considered as a "fee" for the loan.

 

[Mpsox]

I was always thought in banking that the loan amount is the consideration

 

[onq]

I thought the interest on the loan was the consideration.
That is what you are paying the bank for the loan.
It amounts to their profit on the deal.


ONQ.

All advice on AAM is remote from the situation and cannot be relied upon as a defence or support - in and of itself - should legal action be taken.
Competent legal and building professionals should be asked to advise in Real Life with rights to inspect and issue reports on the matter at hand.