Lending money to friends ?

susancs

smartpicture wrote: »

Never lend more than you can afford to lose, that's the bottom line. If you could happily carry on without any resentment or bad feelings or difficulties if you never got it back, then fine. Because chances are, you won't.

And I say that as someone who has lent significant money to several friends and family and never seen it again.

Oh, and when you said you thought you would lose the friendship if you said no - my experience is you lose the friendship when you say yes, because they start avoiding you or lying to you or resenting and blaming you for putting them in this situation. Laughable, but true.

Totally agree with your post. OP you should not consider lending such a large sum to a friend. As others have said there is no guarantee of getting it back even from inheritance as his Parents home may well have to be sold and any money used for example to pay care home costs should they need it. I think it is too bad that this "friend" has put you in this position and is trying to treat you as a bank. I personally would not come up with an excuse, just don't mention it again until he does and then say no sorry we don't lend money to anyone, then change the subject.

Funky_Bold_Ribena

My advice would be for your OH not to get back to him and if he asks again, say 'sorry we discussed it as one of our options and we have invested/decided to invest it all'. And don't discuss it again.

claire16c

How did it not come up to ask what it was for??? I mean it would be different lending money to someone if they were starving as opposed to wanting a holiday or new car etc.

But 10k? Youve got to be kidding. I cant believe you are even thinking about it and worrying so much. Just get your OH to not mention it again.

If they do ask again, then just say no sorry. You say you dont know their financial situation, but you seem to be convinced they know about yours? Why would that be?

It just sounds very odd to me!

Scrapaholic

Have had a quick look at the lending money to friends and family forum which I didn't realise was there . 40 + pages of trusting people who can't get their money back . I really thought I'd get some replies saying for us not to be distrustful of our friends but there hasn't been one saying that . We're not going to bring the subject up but if the friend does (probably when I'm not there ) DH is going to say we have plans for it and change the subject . Friend would have to be really cheeky to press the point . Fingers crossed he doesn't ! Thanks again for all replies .

Rottensocks

Scrapaholic wrote: »

but they have a lovely home , nice clothes and car but no plans for a foreign holiday this year !

If you have a nice house and car, there should be plenty of places willing to lend 10k.... Sometimes the nice house, nice car scenario is a sign of consistently living beyond your means. Avoid!

Scrapaholic

claire16c wrote: »

How did it not come up to ask what it was for??? I mean it would be different lending money to someone if they were starving as opposed to wanting a holiday or new car etc.

But 10k? Youve got to be kidding. I cant believe you are even thinking about it and worrying so much. Just get your OH to not mention it again.

If they do ask again, then just say no sorry. You say you dont know their financial situation, but you seem to be convinced they know about yours? Why would that be?

It just sounds very odd to me!

DH just got a shock when friend asked and said he'd ask me . I would have asked what it was for and probably lots of others would too . Honestly , DH is just too polite , restrained , nice ! Took him unawares ! When I said I don't know their financial position, I meant I don't know what amount they have coming in or what their outgoings are . They're certainly not starving though . They know we're selling a property because we've just about got it sold after a few months . Otherwise they don't know anything else about our finances as it's not something we go into detail about . We do have plans for the money and it won't be lending it to them . The more we think about it , the more of a cheek it seems !

Saturnalia

Crikey, don't do it!

If a bank won't lend to your friend, that's because he doesn't have the income to repay the loan. Either that, or he has a record of not being a prompt payer.

If he's waiting for his parents to shuffle off to inherit, he might be in for a shock when the will is read out! Has your friend been told he will definitely inherit £10k+? Some families skip the adults and give to the grandchildren, for example. Or there are conditions on how the inheritance is to be spent.

Plus there are no guarantees in life (or death!) - if they are in their eighties and in good health, they could possibly live another 20 years! heck, they might even outlive their son!

Even if that is not the case, what happens if they need care home accommodation and decide to go private and spend their hard-earned on some luxury in their last few years?

Nah. Too chancy by half.

Cavemanu

I've lent money to family & a couple of friends in the past.

I don't do it anymore.

My financially reckless sister borrowed £500 off me 7 years ago, I think she still owes me £470 after making a massive song and dance gesture in front of some relatives of paying off the first instalment of £30 at a family gathering. :rotfl:

A couple of friends have borrowed smaller amounts (the £10-£20 here and there, which they conveniently 'forget' about, but I really had to chase them up about getting it back.

I once lent £1000 to my uncle but in this case he did not ask to borrow the money off me, I offered as I could afford to do so at the time and he is a reasonable person who has helped me out when I was a skint student and I wanted to return the favour. We drew up a payment plan and had it independently witnessed. That then caused a rift between him and his sisters (my aunt and my mum) because he had not asked for a loan from my aunt (which he would not want to do as he said he would feel beholden to her and they got upset that a younger generation of the family leant him the money!). That was just to alleviate a cashflow situation, so I got the money back in 15 months, on schedule and he donated the base rate interest to the Big Issue Foundation, which was my side of the deal. So it worked out OK.

I found out recently that my mum had borrowed £5K from my aunt over 20 years ago. My maternal grandmother passed away last year and all 3 siblings inherited some money. My aunt then asked my mother to repay the loan. My mother was whingeing about the interest she had to pay (5% per annum and not even compound interest, which would make her mind boggle as she is not so good at maths and %APR etc). So basically had to pay back what she had borrowed and a similar amount of interest owing to the duration of the loan! I had to gently explain to my mum she had received a good deal from her sister, as interest at the time of the loan was around 7% it was just that interest rates now are at an historic 350 year low of 0.5%! I had to show her the Bank of England historic interest rates to explain it to her and get her to check with her bank manager if she didn't believe me!. Also my aunt was willing to lend her sister the money but hoping to get at least back what she might have got by just putting it into a savings account is not unreasonable if you can help your family out. So, even if you are well intentioned you can lend to utter ingrates who despise you for having the money IMHO!

Steer well clear. Lending money to 'loved ones' tends to bring out some really weird 'game playing' dynamics between the lender and lendee (in a Transactional Analysis sense).

hth

balletshoes

Scrapaholic wrote: »

Don't know if this is the right forum . We're due to get money from a sale of property soon and a friend has asked for us to lend £10,000 . Interest would be paid on this . We think the friend is waiting for his inheritance from parents who are 80+ and will pay us back from that ! Friend said for us to think about it but we needn't do it if we didn't want to . There is obviously no date that can be put on the return of the money . What happens if we write something to say money is owed to us , sign it and each have a copy . Would that even be legally binding ? If we say no, then we feel the friendship will become strained and if we say yes , in reality , we may never see the money back .We have been friends for 25 years but sometimes circumstances change don't they .Should we not even be worried , should we just go on trust ? We feel we've been put into an awkward position. Any thoughts or anyone been in a similar situation ?

the friendship had the potential to become strained the moment your friend asked to borrow such a large sum of money from you - their issue, not yours.

With family and friends, if you lend money, I always think its best to look at it like "can I afford to give this money away, not lend it, because worst case scenario - I won't see it again". In your case theres also the awful scenario that you won't get the money back until your friend's parents die, and a lot could happen to their expected inheritance before then, they may not get £10,000 inheritance, they might not get a bean!

How would your relationship be with your friend if you never got the money back?

JanCee

Just say no. Your money, your choice. Don't even attempt to come with some kind of excuse - you don't need to, you are not a bank or lending company. Your "friends" have absolutely no right to even ask to borrow money from you.