Helping a friend

Domlowe

A mate of mine is in debt of approx 3k to several people (rent/tax/mobile phone companies/friends/existing loans/credit cards).
He's only 23 lost his mother last year, has no father and a baby expected in September, he's had some awful luck in other parts of his life too and as his last resort he's come for me to help him by lending him some money.
I lent him 2.5k for the same reasons 2 years ago but he had more difficulties and still owes 2k of that...The only reason I'm considering this is because he's a good friend, works hard and I trust him - he has just not learnt how to be good with money yet and I want to help his little family off down the right road.
He also needs say 5k for a reliable family car, he's bought several cheap ones that have broken down badly pretty soon after contributing to his woes.
I'm 51, homeowner and have some savings in the form of ISAs which I don't want to touch so am considering taking out a loan for about 8k and a rate (4%) less than he could get with his credit history, then he can clear his debts, get the bailiffs off his back and buy a car but putting it in my name so I can take it back if if doesn't keep his end of the deal. He reckons he can pay back £300 a month.
My first post on here - just wonder what peoples thoughts are and whether there are any better options out there I've not thought of...

19lottie82

I don't think anyone on here is going to tell you that this is a good idea I'm afraid.

If he "reckons" he can afford to pay back £300 a month, then why hasn't he been paying this every month towards the 2k he already owes you?

The only advice I will give is, only lend what you can afford not to get back.

quidsy

Can you afford to lose the 10k he will owe you? if yes then do it but expect that he is not able to keep the payments up & you will end up footing the bill.

How will you guarantee that he wont just up sticks or refuse to pay you? You will have zero recourse to get any money back.

As for needing 5k for a car, absolute bs, I have a car that cost 2k & it runs like a dream, 12 years old, less than 50k on the clock. No one needs a 5k car or any car for that matter esp when they are on skid row

TBH, he sounds like a chancer & you are the perfect mark.

dandelionclock30

Dont do it, you wont get it back.
Refer him to the credit union and also to CCCS and the CAB for help with debts and baliff issues.
If he cant run a decent car then he needs to be taking the bus/cycling or walking.

Herzlos

You can get him a reliable family car for far less than £5k (I sold one for £500 a couple of months ago). Have a look at Mondeo/Vectra/Rover 75s for under £1000. Really all he needs is something you can fit a baby seat into.

As for the debt clearing part, that's up to you. But you certainly don't need to spend £5k on a car.

Caz3121

Domlowe wrote: »

I lent him 2.5k for the same reasons 2 years ago but he had more difficulties and still owes 2k of that...

He reckons he can pay back £300 a month.

From track record he has managed to pay back the equivalent of £20 per month for the previous loan, is in arrears with rent, loans, cards etc

It may be hard but if someone just rocks up and bales him out again he will never learn, spend, get debt, borrow, spend, more debt, borrow.

He needs to look at the debt free board and address the debts he currently has and not be looking at getting more.

If you want to gift him a car and write off the debt he currently has then you are perfectly able to do that but do not be surprised when another year or 2 down the line he is back in exactly the same situation

Mallotum_X

Treat it as a gift and if you get anything back its a bonus. You may be better off helping him to speak to a debt charity and setting up a repayment plan he can afford.

quidsy

He doesn't need a car at all, people survive without them.

Clive_Woody

He owes other people £3k of debt including rent, he owes you £2k already yet he reckons he can pay back £300 per month. Doesn't add up to me. Where has that £300 per month been going up to now?

He's managed to pay you back £500 in two years, yet he tell you he has £300 per month spare, that's £7200 in two years unaccounted for.

I think you are being taken for a ride.

DigForVictory

The best gift you can give this lad is a firm steer here! Let the MSE community point out the path, cheer him on & take up cudgels on his behalf.

Please, don't take out a loan for him. My beloved Mondeo cost me under £5K only slightly used & with a very comprehensive servce pack - and I could replace it tomorrow for under half that.

Don't give him money - give him the means to figure his path out for himself.

Domlowe

I hear what you guys are saying, thanks - good points about spending less on a car - I'm meeting him later this week to look at options so we could be looking at £6k all in not £8k.
As I've said I know and trust him, he's been a good friend for many years and I know where he lives, he won't want to cross me. Sometimes people need a helping hand and it's up to those that can
I intend to sit down with him, go through his monthly expenditures and create a budget template he will have to complete and show me every month, if that shows he has the capacity to borrow some money, consolidate the bad debts and start repaying some others then I'll help him - give a man a fish or teach a man to fish...