Should Thelma lend Louise money?

MSE_Martin
MSE_Martin Posts: 8,273
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Money Saving Expert
Here's this week's hypothetical situation for you to cogitate on:
Should Thelma lend Louise money?

Thelma's best friend since childhood, Louise, has always been terrible with cash; and now she's got into serious debt and is in danger of losing her home. She's asked Thelma for a loan of £10,000. Thelma's very affluent and can afford to lend without a problem, and she would hardly notice even if she lost this huge amount. They've always been through thick and thin together and supported each other in everything. Should Thelma lend Louise the cash?

Similar but not the same as a past one...

You may think this is very similar to 'should Jane lend her friend the cash', well it’s more than just the names that have changed - Jane could afford to lend the money, but couldn't afford to lose it, Thelma can – does that make a difference?

Martin

Click reply to enter the money moral maze (please remember, be polite to other MoneySavers, even if you disagree with them).


Previous MMDs: Should Monica go out with Bill for his money?and Should Madge flog Harold’s stuff on eBay?
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Martin Lewis, Money Saving Expert.
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
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Comments

  • reehsetin
    reehsetin Posts: 4,916 Forumite
    if she can afford to loose the money and not be bitter about the money if its not repaid then yes
    otherwise help her find a way to manage her own money and remind her that she always has a roof to share
    Yes Your Dukeiness :D
  • binman
    binman Posts: 2 Newbie
    she can afford to lend and lose, then she should lend to help her friend but she should (for her friends sake) ensure that this is not treated as a 'get out of jail card' and that her friend is fully aware of the commitment she is engaging in with her friend.

    Assuming that her firnd isnt going to want to make any interest, they should sit down and agree (before the cash exchanges hands) how it will be repaid.

    maybe just regular monthly payments, maybe with flexibility, but she needs to ensure her firned is fully commited, and stays that way, to repaying her, otherwise she may find her friend getting into further debt with something else.

    Even with if she can afford to lose it, she should have a commitment to heloping her friend if she lends the money.
  • Tustastic
    Tustastic Posts: 2,096
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    Thelma can afford to lose the money, but can she afford to lose Louise's friendship? It's very common for people who borrow money and can't afford to pay it back, not only to avoid the friends who loaned them the money, but even to take a strong dislike to them.
    In Thelma's place, I would tell Louise the £10K is a gift, not a loan, and that in return she should agree to join MSE and at least read the DFW boards every day. Might just bring her LBM a few days quicker.
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  • anewman
    anewman Posts: 9,200
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    I think the key really is in whether Thelma could afford to lose £10k and would be happy to effectively almost give the money away. As a wealthy woman, this is possible, but in today's society of greed unlikely.

    I guess there are cases in which lending money is ok but my personal experience is to never lend anyone more money than you'd want to lose, as the first time I lent money to someone the promises to pay back soon were not acted upon and I only ever got a quarter of the money back.
  • Hilsax
    Hilsax Posts: 2 Newbie
    I'd say absolutely not. I've done it and am still regretting it.

    If you can afford it, GIVE someone the money they need, but never lend to friends. Cynical? Moi?

    Hilary :o
  • rmg1
    rmg1 Posts: 3,121
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    I agree with binman.
    Thelma could lend Louise the money if she could spare it (and obviously can) but it shouldn't be treated as a gift.
    There should be a repayment plan in place before anything else is done.
    Louise should also think long and hard about her finances and where the money is going. It might also be helpful if she can write down all the spending she does and work out what she can do without.
    Assuming Louise has a mortgage, it might be better to clear her debts with this £10K, sell the the house and get something smaller (circumstances permitting).
    Then again, if Louise already has a mortgage, maybe a remortgage would be better. The terms are fixed from the word go (apart from the interest changes) and you don't risk a friendship.
    :wall: Flagellation, necrophilia and bestiality - Am I flogging a dead horse? :wall:

    Any posts are my opinion and only that. Please read at your own risk.
  • Enterprise_1701C
    Enterprise_1701C Posts: 23,409
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    I personally would lend the money but only if

    a) a repayment plan is in place, however small;

    b) the friend promises to get financial advice from somewhere like the CAB, and I would go with her to make sure of this and so someone else is there to take notice of what is being said; and this would make sure that she fulfilled her second to last part of the bargain:

    c) an absolute promise to take better care of finances in the form of something like a home accountancy program to ensure that she NEVER got this far into deblt again and last but not least:

    d) she signed up to this website!
    What is this life if, full of care, we have no time to stand and stare
  • Idiophreak
    Idiophreak Posts: 12,024
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    If my best friend, since childhood, asked me for the money, really needed it and I didn't, I'd hand it over without a second thought.

    So what if they don't repay me in money? My friends' happiness is worth more than cash.
  • laney365
    laney365 Posts: 18 Forumite
    I lent my childhood friend money but all the time it was owing, she felt that she had to explain her circumstances to me. She paid the money back and we remain friends but I get the feeling something has changed. Its a great shame.
  • If she felt able to ask for the money then surely this is about friendship rather than money - there's no point having loads of money but no friends.

    My family have helped me out in times past and it was the one way my mother could keep control over my life - I would have much rather borrowed from somone with no strings attached. Even now I can't ask my parents for anyhting without thinking that there will be a catch if they agree.
    Better to let the money go without forcing your friend into 'debt rehab' and stay friends if you value that friendship enough.
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