A delicate situation ...

doinwell

Good day folks!

I came across a rather delicate situation and wondered how best to tackle it. A friend of mine (who has been a friend for over 20 years) said to me that they were unable to get a loan due to poor credit history etc. They asked me if I could either obtain a loan on their behalf or find some way to obtain the cash and they will repay me. Is anyone aware of any credit unions etc who I may be able to approach? I note having read the section on loans it said you could borrow money without actually having to be a member. The sum they are looking for is £5k.

The only reason I felt the credit union would be a good option is due to the fact I may probably need to borrow money myself next year for renovations to my property, and I want to leave myself open to possibly using credit cards and/or obtaining a loan myself. Although my credit history is good, I don't want to jeopardise my position. You've got to be a bit savvy about these things. I would also prefer them to have the loan to deal with themselves as opposed to me being involved. That way, if they default, it does not cause a situation between me and my friend.

Alternatively, if I did get the money for them, what ways (legally) could I cover myself (recover my money), if by some remote chance they do default on payment?

Any guidance or thoughts on this matter would be greatly appreciated. I live in London by the way (just in case geography is important).

Kind regards, doinwell

ILW

Only give them money as a gift you do not expect to get back.
They have a poor credit rating for a reason.

broad-sword_2

It's been said all before, and there are plenty of posts on here about lending or getting loans for friends and family. Please, consider though, if you are looking to borrow yourself for the renovations next year, what impact will owing £5,000 have on your chances?

antrobus

See:-

How to collect on personal loan to a friend who disappeared?
https://forums.moneysavingexpert.com/discussion/4088373

kazwookie

Don't do it.

If they don't repay you and have poor credit rating now, you will have no chance in recovering your money.

Curiousg

antrobus wrote: »

See:-

How to collect on personal loan to a friend who disappeared?

rub it in why don't you antrobus!

i totally agree... i had a mantra of NEVER lending friends/family money, and I made one exception. biggest mistake I've ever made. expect to lose your friend faster than your money.

Apples2

doinwell wrote: »

I came across a rather delicate situation and wondered how best to tackle it.

You tackle it firmly by saying no.

If you want to puff it out a bit, tell them you intend borrowing for yourself soon so cannot commit anything financially as it WILL risk your own acceptance.

Lenders will not lend to them as they are convinced the money will not be returned (hooray for credit histories). If they are not prepared to take a risk with all their experience and might at recovering debts, what hope would you have??

They have a Poor Credit history because they do not repay debts but are happy to carry on trying to borrow elsewhere.... think about that for a minute..

A signed piece of paper may as well be written on bog roll for all the use it will do you if they don't pay.

Pointing THEM at Credit Unions is a good choice, but it would be a miracle if they got anything like £5k offered.

It's their mess and they have to lay in it, you wouldn't be pulling them OUT, they would be pulling you IN.

The Warning to you is clear, before you contemplate ignoring us and going for it anyway, spend a while reading this post
https://forums.moneysavingexpert.com/discussion/76953

dealer_wins

Dont do it.

Polite way:

Say you dont have funds available and you also cannot get a loan due to poor credit.

"Tell it how it is" way:

Tell them that it is not on to ask you to borrow money on their behalf under any circumstances, and you are disappointed they have asked you/played on your friendship/loyalty etc.

DCFC79

If you can afford to lose the 5k then gift it to them if not then tell them to either cut they're spending and outgoings or a credit union.

Why would you say " Is anyone aware of any credit unions etc who I may be able to approach? " Its they're debt so point them in direction of a credit union.

They have poor credit for a reason and that is paying the debts they have so if they cant keep up to date with repayments for loans etc then do you think your friend would keep to the agreed payments ?

AMILLIONDOLLARS

The best advice you can give your friend, is to direct them to this site. There is lots of help for people in their situation, give them the site address and recommend that they follow the Debt Free Wannabe Board, as well as the thread about lender to family and friends.

Ultimately you have to say No, or you will sincerely regret it, a true friend should not have put you in this positon, either way be prepared to lose a friend, preferable than losing your money!!

Good Luck

AMD

angelsmomma

I agree with all the others. Please don't lend them any money.

I lent a really good friend £5000 from my credit card and although it did eventually get paid off I had to ask every single month for the payments and listen to the hard luck stories of why it was so difficult for them to clear the balance and just make minimum payments.

It took years and once paid they no longer contact me and its been 2 years now.