Money Moral Dilemma: Should I charge my girlfriend interest for a 'loan'?

Talent

Do not lend anyone any money ever! For whatever reason! If you can afford to lose the amount requested/demanded then give it. Don't expect it back.... don't ever bring it up in conversation under any circumstances, forget it. If you can't follow this advice then don't do it.
You could follow the advice earlier and register the car in your name and take care of all the finances. That would be nice.

splitinfinity

Dont do it. Lending money to family itself has issues, even with the blood ties and all etc. And this is a GF/partner, with whom we are not sure how long you have been. The money will take a long time to pay off (assuming your lending several £K of money), and your relationship over that time may change - which puts your finances at risk.

You have 2 options:
1. buy the car yourself and she pays the upkeep on it. You still lose out this way, regardless of whether you split with her or not. The car will depreciate and when you come to sell the car, you will not get your full amount back. Also in the event of a scrape or dent - the car devalues. And if she is particularly upset with you, I have a feeling the car may get a few scrapes.
2. Refuse. Instead of spending the money on a depreciating asset, say your saving up for a house, which is an appreciating asset. If she is upset with that decision, which she will be, then you need to explain why it is a bad idea. How the loan can strain your relationship and how she needs to be more financially stable before she can deal with that kind of loan. But if she is really into you, she will come to terms with it. Your money, your decision.

Mojisola

gabriel1980 wrote: »

I think you should lend her the money and not charge interest. I mean she is your girlfriend!

If someone was doing me a favour by lending me money, I wouldn't want them to lose out on the interest they could have earned from it. I'd insist on making up the lost interest.

Still think it's probably best not to lend - help out by finding the best deal instead.

canucrackit

splitinfinity wrote: »

Dont do it. Lending money to family itself has issues, even with the blood ties and all etc. And this is a GF/partner, with whom we are not sure how long you have been. The money will take a long time to pay off (assuming your lending several £K of money), and your relationship over that time may change - which puts your finances at risk.

You have 2 options:
1. buy the car yourself and she pays the upkeep on it. You still lose out this way, regardless of whether you split with her or not. The car will depreciate and when you come to sell the car, you will not get your full amount back. Also in the event of a scrape or dent - the car devalues. And if she is particularly upset with you, I have a feeling the car may get a few scrapes.
2. Refuse. Instead of spending the money on a depreciating asset, say your saving up for a house, which is an appreciating asset. If she is upset with that decision, which she will be, then you need to explain why it is a bad idea. How the loan can strain your relationship and how she needs to be more financially stable before she can deal with that kind of loan. But if she is really into you, she will come to terms with it. Your money, your decision.

Spot on, its a depreciating asset so even if she does leave you - you will probably still lose out as the cars not worth anywhere near what you paid for it.

Lend to friends and you lose your friends plus interest.

Dorothy2311

There are two people in this world who owe me money…Both are Ex-Partners! My last BF owes me over £2000 including a £500 payday-type loan which he promised to repay in full on the due date… Of course I never got the money (even though we were still together at the time) and I now have another debt against my name. So if I was you I would not lend her the money, unless you can afford to actually lose it. Often people only show their true colours when things go wrong, whether it’s due to money or you two falling out over another issue… If she can’t get a loan elsewhere, i.e. bank or parents, then draw up a formal contract for the loan amount, repayment amounts and repayment dates and get it signed by her as well as an impartial witness – ideally a solicitor. If you do that I would not add interest however, it just makes you look petty.

tgroom57

HappyMJ wrote: »

My advice....buy the car yourself in your name, you maintain it, pay the tax on it and insure her as a driver of it. If she wants to leave the car is yours. I'd then ask her to pay a contribution towards the running costs of it as anyone in a couple would do with the finances being shared....but as long as she fills it up with petrol and helps pay for her fair share of the household bills including these bills then I think you don't need to ask for any more.

How do you split the rent, council tax, gas, electricity, water, tv licence?

Best answer I've seen - except she should arrange and pay her own insurance.

Potternerd

Don't lend it.get her to sort out her own finances. If she can't get a loan it's probably because she's a bad risk.

Stevie_Palimo

comeandgo wrote: »

HMRC would be interested if you are making money from a loan. Give her the money and be done with it man.

Lol really for all of £2.00 that you charge, Seriously I believe the HMRC has bigger fish to fry than a few quid between friends, family or partners.

lvl68

My parents lent me £1500 for a car, and charged me the interest they would be loosing from the savings account (I paid it back within a year). I didn't have a bad credit rating, but that rate is better than a bank's loan rate and keeps the money in the family! I think it's slightly mean to do that to your kids, but think its the right idea if lending to a brother, for example. but bf/gf is more risky!

I would either buy the car yourself, as yours, or encourage her to buy a cheap one with her own money.

Eternal_Opimist

If you are asking the question you probably aren't comfortable with it.

Do you think that morally you shouldn't charge her interest?
Or
Do you not trust her to pay you back?

I think you need to look to your relationship first; then consider the loan.