euro to £ loan

Sylvia100

Hi everyone I have a question - A friend of mine wants to borrow £5000 . I happen to have £5000 in euros and am happy to lend her the money. However I had to covert the euros into pounds which was 6400 euros. When I want my money back should I just ask for the £5k or ask for the euros?

Paul_the_Painter

It depends on what you want! If you will be converting it back to euros eventually, then ask for it to paid back in Euros, if you will be leaving it pounds, ask for it pounds, if you don't care pounds is easier. But make sure they agree before handing over the cash, and get a written agreement!

marcarm

You should also ensure you are happy never to see your money or the friend again as that is what invariably happens.

Not saying your friend is like that but there are plenty of threads on here asking what to do when a loan to a friend goes wrong.

Only lend money you are prepared never to see again

jonesMUFCforever

Sylvia100 wrote: »

Hi everyone I have a question - A friend of mine wants to borrow £5000 . I happen to have £5000 in euros and am happy to lend her the money. However I had to covert the euros into pounds which was 6400 euros. When I want my money back should I just ask for the £5k or ask for the euros?

Before you consider this just ask yourself one question.
Why cannot the friend get a loan for themselves from their bank?

As others have posted if you are happy to lose the money and the friendship go ahead and lend - if not run a mile.

dealer_wins

Give her the the cash in £ or Euros, but only if you are happy not to see a penny of it again in either currency!

tripled

I would echo the sentiments expressed by the others above. Even with the best of intentions, things happen that are outside of our control and through no fault of their own your friend may be unable or unwilling to pay you back.

Lending in a foreign currency is especially risky. If the pound weakens and you lend in euros they will need to find extra money to buy the euros to pay you back. If you lend in pounds, the risk shifts to you.

If you really want to go ahead, you need to decide who will shoulder the risk of currency movements, or if you will split the difference. Agree the terms of repayment (i.e. duration, what currency it will be paid in, etc.).

You then need to decide if you want a written agreement so you could try and sue your friend if they can't repay (easier said than done, and ineffective if they have no money to pay you with). If not, then you'd likely have to write it off to experience.

I lent a few hundred pounds to a friend last year for "a few weeks" who so far has coughed up a fiver. However, I'm sure he will pay eventually. 10 years ago he owed me a grand which he was going to repay over 12 months and he did - about 6 years later. I had a written agreement for that one but I never did sue him.

Voyager2002

Do a search on 'peer to peer lending' and suggest that route to your friend. If her credit rating means that even this route is not open to her, then either simply make a gift of the money or explain that you cannot help.

Nebulous2

Voyager2002 wrote: »

Do a search on 'peer to peer lending' and suggest that route to your friend. If her credit rating means that even this route is not open to her, then either simply make a gift of the money or explain that you cannot help.

Peer to peer lending may well be more difficult to get than some traditional routes. Zopa prices itself on the thoroughness of its underwriting with lower default rates than most other channels.

AnotherJoe

Make it clear you want the Euros, or you will lose about 10% overall. Though odds are you'll lose it all in any case. Also if you make it clear its Euros You need not be concerned about currency fluctuations.

Write it down, get it dated and signed. And don't expect to ever see the Euros or Pounds again. As someone else said, if she can't get a loan from all the other sources around, why is that ?

bengalknights

If your transferring in Euros then best to request back in Euros as its easier to account for

dresdendave

Although exchange rates will fluctuate, one thing is certain, €0.00 will always equal £0.00