Money Moral Dilemma: Should I charge my girlfriend interest for a 'loan'?

Former_MSE_Nick · 10 August 2015 at 11:51AM

This week's MoneySaver who wants advice asks...

My girlfriend wants to borrow some money from me to buy a car. I can spare the money but it's still quite a lot - is it unreasonable to charge her interest on the 'loan'?

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iclayt · 11 August 2015 at 8:43PM

Calculate how much interest you would earn if it was in a savings account and say you'll charge her that as interest. And then deal with the potential upset.

Seriously - how much are you really going to lose on interest in a savings account? If you trust her to pay you back, just lend her it, she's your girlfriend, not a mate of a mate in the pub.

If you were my boyfriend and you tried to charge me interest I'd soon remind you of it when you needed a lift somewhere.

*Robin* · 11 August 2015 at 8:48PM

The obvious problem is what happens if you split up?

Without knowing more about the relationship and ages of those involved, not to mention GF's financial history, it is hard to say this type of loan is a good idea.

Tigsteroonie · 11 August 2015 at 8:51PM

Don't loan her any money unless you can afford to lose it all. Not all relationships last, and soft loans such as this rarely get repaid. ("It was a gift!")

Indie_Kid · 11 August 2015 at 8:53PM

I don't think I've ever charged interest on any money I've lent. But I've only ever lent money to my parents. And it's only been if I can afford to do so.

HappyMJ · 11 August 2015 at 8:57PM

My advice....buy the car yourself in your name, you maintain it, pay the tax on it and insure her as a driver of it. If she wants to leave the car is yours. I'd then ask her to pay a contribution towards the running costs of it as anyone in a couple would do with the finances being shared....but as long as she fills it up with petrol and helps pay for her fair share of the household bills including these bills then I think you don't need to ask for any more.

How do you split the rent, council tax, gas, electricity, water, tv licence?

Carl31 · 11 August 2015 at 9:08PM

if either way, shes paying interest, its probably better she goes through a proper lender, everyones protected then, and it saves potential arguements later on

amistupid · 11 August 2015 at 9:21PM

MSE_Nick wrote: »

is it unreasonable to charge her interest on the 'loan'?

What about payment in kind.

onlyroz · 11 August 2015 at 9:43PM

Unless this is a rock solid serious relationship, i.e. you are already at least living together, or engaged, then I wouldn't lend the money at all. And if you do decide to lend then be prepared to never get it back.

Mojisola · 11 August 2015 at 9:48PM

*Robin* wrote: »

The obvious problem is what happens if you split up?

Without knowing more about the relationship and ages of those involved, not to mention GF's financial history, it is hard to say this type of loan is a good idea.

But if you do go ahead, get it all in writing and signed and witnessed so the "gift" argument can't be used in the future.

fierystormcloud · 11 August 2015 at 10:26PM

HappyMJ wrote: »

My advice....buy the car yourself in your name, you maintain it, pay the tax on it and insure her as a driver of it. If she wants to leave the car is yours. I'd then ask her to pay a contribution towards the running costs of it as anyone in a couple would do with the finances being shared....but as long as she fills it up with petrol and helps pay for her fair share of the household bills including these bills then I think you don't need to ask for any more.

Good idea.

Tell her this is what you want to do. If she disagrees, then say you can't do it.

Money Moral Dilemma: Should I charge my girlfriend interest for a 'loan'?

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