Lending money to friends ?

pjb2u

Just say no, there are many other ways of getting funding

BitterAndTwisted

There's something really nasty and predatory about seeing some friends selling their house and suddenly asking to borrow a VERY SUBSTANTIAL AMOUNT from the proceeds. To say nothing about borrowing against an alleged "inheritance".

I'd tell this person where to go. And it wouldn't be to a bank.

Georgiegirl256

BitterAndTwisted wrote: »

There's something really nasty and predatory about seeing some friends selling their house and suddenly asking to borrow a VERY SUBSTANTIAL AMOUNT from the proceeds.

Yes, there is actually, it would make me feel really uneasy.

It makes you think, why he doesnt just go to a bank etc....maybe his credit rating is shot to bits, maybe he doesn't want to make regular repayments, maybe he doesn't even want to make ANY repayments at all....

angelsmomma

I lent a really good friend £5000+ and it took me years of asking to get it back in dribs and drabs as something important came up every time I asked that she needed to pay first.

I did get most of it back but because I had to get tough in the end and keep at her every few days, when it got down to under £100 I stopped asking as it was too stressful. I have not heard from her since.

I can't say this firmly enough "Don't do it"

JimmyTheWig

Oh what a difficult question.
You either lend them the money, knowing there is a chance that they won't pay it back or you say no to lending them the money which is the equivalent of saying "we don't think we'll get it back" which, as you say, will strain the friendship.

You can probably draw up a legally binding document that says they owe you the money. But what are you going to do if they don't repay you? Chances are they won't repay you because they can't. So you take them to court (at an expense) with your legally binding document and win. The court says they must pay you. But they can't. So maybe they pay you a small amount each month. Going to take a long time to get back to the £10k.

You can't rely on an inherritance. He might fall out with his parents and get nothing. His parents may go on to live for 20 more years and need to be in a care home for much of this - by which time any inherritance will have withered away. Without wanting to be morbid for your friend, his parents might outlive him.

So I think that you are right to think that you may not get this money back. It's just a question of whether you are prepared to take that risk for your long-term friendship.
It's hard to call, without knowing your financial situation. What would happen if you lost £10,000 of this money? How disasterous would it be for you?

What are your plans with this money? Will you be buying another property at some point? Or investing it? or spending it?
Could you say no on the basis that you plan to need it over the next couple of years?

tayforth

NO NO NO NO NO NO NO NO

Not a good idea. As others have said, if they don't want to be friends after you refuse, they are just using you!

They shouldn't even have asked, tbh.

Just say that it's earmarked for something else, as has been suggested.

Person_one

Its massively offputting that their plan for repayment is waiting for parents to die.

I'd be very suspicious if I heard about any falls or accidents...

victory

No no and thrice no, no way, your next thread will be ....they never paid me back what do I do now?

No.

Scrapaholic

Thanks to all for your replies . All of the things said by you we've said ourselves . Yes , it's a bit distasteful that it may be paid back from an inheritance . We only think it's this because we dont see any other way that £10,000 could be repaid. We could be wrong , but don't think so . Yes, parents could outlive the person or leave it to the dog shelter . DH didn't ask what it was for as he said he'd ask my opinion re the loan and I wasn't there .
Jimmy the Wig , we had planned to invest it . At this point we're ok and don't need it . The person knows this so can't use that as an excuse . Wouldn't like to lose it for ever though as we've got family we could give it to if we knew we weren't going to see it again ! May have to work out something along those lines of an excuse , don't know yet . Don't know why they haven't gone to a bank , as someone said. Just don't know why they'd ask us . DH was taken aback by the question . I know we don't know their financial position but they have a lovely home , nice clothes and car but no plans for a foreign holiday this year ! It's on our minds a lot at the moment . Not one person so far has said to go ahead and lend the money . We really don't want to do it .

tayforth

Scrapaholic wrote: »

Thanks to all for your replies . All of the things said by you we've said ourselves . Yes , it's a bit distasteful that it may be paid back from an inheritance . We only think it's this because we dont see any other way that £10,000 could be repaid. We could be wrong , but don't think so . Yes, parents could outlive the person or leave it to the dog shelter . DH didn't ask what it was for as he said he'd ask my opinion re the loan and I wasn't there .
Jimmy the Wig , we had planned to invest it . At this point we're ok and don't need it . The person knows this so can't use that as an excuse . Wouldn't like to lose it for ever though as we've got family we could give it to if we knew we weren't going to see it again ! May have to work out something along those lines of an excuse , don't know yet . Don't know why they haven't gone to a bank , as someone said. Just don't know why they'd ask us . DH was taken aback by the question . I know we don't know their financial position but they have a lovely home , nice clothes and car but no plans for a foreign holiday this year ! It's on our minds a lot at the moment . Not one person so far has said to go ahead and lend the money . We really don't want to do it .

It's good that you weren't there. Your DH can tell them that you've said no. No excuses or justification required.