Lending money to friend - need contract template

AndyBSG

Advice on lending to friends here along with links to loan templates

http://www.choose.net/money/guide/features/informal-loans-family-friends-help.html

wundress

AndyBSG wrote: »

Advice on lending to friends here along with links to loan templates

http://www.choose.net/money/guide/features/informal-loans-family-friends-help.html

Thanks that has reassured me that what I have written so far is along the right lines.

I've put down what the loan is for, amount of the loan, how much is to be paid each month, the amount of instalments, date each month it has to be paid by, what happens if it's not paid, amount of interest etc.

Derwent

Wouldn't it be better to do this as a rental agreement rather than a loan agreement ?


e.g. you buy the laptop and retain title over it, your friend agrees to rent the laptop from you for the sum of £x per month until such time as rental charges paid amount to the purchase price of the laptop, after which the title to it passes to your friend


In the interim the laptop remains your legal possession in the event of anything going wrong.

enthusiasticsaver

I very much doubt it would be cost efficient to enforce such a contract. You would have to take her to the small claims court if things went wrong. If her partner works and won't take out credit to help her why would you? If the banks will not lend to her there is a strong chance she has bad debts from previously. You have been warned but I guess you are going to do it anyway in which case it is a gift.

wundress

I've written it as a rental agreement. 11 monthly instalments of £50. I retain title of the laptop until the final instalment has been paid.

I know she can afford it. They managed to fork out 10,000 for their wedding.

She didn't ask for the money, I offered. It's not a gift and she is fully aware of that. A gift is where you don't expect to be paid back. I do.

SilverSaloon

i would be asking myself these things:


1. partner works.... can he save £xxx over a few months and buy it himself.

2. is a 2nd hand laptop the answer?

3. what have they sold from their "luxury items" to try and buy it themselves?

LadyDee

£10,000 for a wedding yet haven't got a few £000s for a computer?

MABLE

wundress wrote: »

Hi


Hope this is in the right topic.


I'm buying a laptop on behalf of a friend and she will be paying me back in monthly instalments.


I've been trying to draft a contract so we both know where we stand but I'm struggling with the wording and wondered if there are any decent templates for this sort of thing?


I want to include a clause that interest will not be payable unless my friend defaults or doesn't pay back full amount within the time frame. Basically I want it in as a scare clause. Got to cover myself!


Does anyone know where I could find such a sample contract? Google didn't come up with anything useful.

Contract or not you risk losing a friend. DONOT DO IT

DevCoder

Any contract you write will be useless, a rental agreement is almost as worthless as a loan contract (I assume you have a consumer credit license )

If your friend "defaults" then you can take them to small claims court but if they don't have any money then your contract will do absolutely no good at all, that is if its taken seriously by the court or if your "friend" legal counsel doesn't tear it to shreds as most internet based template contracts aren't the best when it comes to covering all the bases of contract law.

If you are determined then just lend them the money but on the realisation you wont get anything back if they default on it.

27col

Derwent wrote: »

Wouldn't it be better to do this as a rental agreement rather than a loan agreement ?


e.g. you buy the laptop and retain title over it, your friend agrees to rent the laptop from you for the sum of £x per month until such time as rental charges paid amount to the purchase price of the laptop, after which the title to it passes to your friend


In the interim the laptop remains your legal possession in the event of anything going wrong.

What a very sensible idea! There is a very strong built in incentive for your friend to ensure that she pays you back.