Cash loan to a friend,

MrBluesky_2

Hi,
A friend has asked me for a cash loan of £18k i want to loan the cash but i would like to have some sort of contract so i do get my money back without hassle.
Friend is in the late stages of renovating their property which is going to be sold when renovated and has run out of cash.They are finding it difficult to raise funds themselves.
Should i approach a solicitor to draft a contract,i really want to help my friend but need reassurance i get my loan back.
Any thoughts,

Thank you for your time.

Candyapple

You have no assurances you will get a single penny back - legal contract or no contract.

Don't do it.

If you are happy to accept losing £18k, then give it as a gift. That way, if your friend pays you back, you don't have to worry about it. There is absolutely no protection or comeback for you if your friend doesn't pay you back.

https://forums.moneysavingexpert.com/discussion/5644832

Ebe_Scrooge

As CandyApple says - either give them the money as a gift, with no expectation of it being repayed. Or else don't lend them the money at all.


A legal contract would carry very little weight, at best, in the event of non-payment. Plus you'd have the expense and hassle of having to take them to court. Plus you'd lose the friendship. Plus you'd still end up with nothing if they genuinely didn't have the means to repay you. There's a reason they're struggling to get a loan from tradtional lenders........


There are 1001 stories on this board about just this type of situation. Just don't do it, simple as that. Unless, as previously mentioned, you're happy to just give the money as an outright gift.

NinaSwiss

Personally I would not loan that sort of money to anyone.

However, you could look into how possible it is to put a charge on the property been built/renovated so that you can also be paid off from the proceedings of the house sale.

Perhaps someone more knowledgeable can advice on that.

DCFC79

I also wouldn't lend that amount of money, it could take months to sell and if that were the case would you be happy to wait for your money.

If you want to lend the money then follow the advice that's been posted.

Hasbeen

MrBluesky wrote: »

Hi,
A friend has asked me for a cash loan of £18k i want to loan the cash but i would like to have some sort of contract so i do get my money back without hassle.
Friend is in the late stages of renovating their property which is going to be sold when renovated and has run out of cash.They are finding it difficult to raise funds themselves.
Should i approach a solicitor to draft a contract,i really want to help my friend but need reassurance i get my loan back.
Any thoughts,

Thank you for your time.

Have altered your heading for the next time:)

Cash loan to EX friend how do I get it back?:(

Pixie5740

If you do decide to go ahead and lend your friend £18k make sure it's a secure loan with a charge against the property. Even then having a charge isn't a guantree you'll get all your money back just like putting it in writing doesn't guarantee you'll get your money back.

davidwood123

Don't do it

AndyPix

Dont get involved It will DEFINITELY end in tears and loss of friend.


Just pretend you havent got it if you are finding it hard to say no..
What would they do if you werent an option ?

Gambler101

Like others said give it to them as a gift.

That way if you get the money back its a bonus.

I wouldnt dream of lending that sort of money to anyone by the way!

dresdendave

NinaSwiss wrote: »

Personally I would not loan that sort of money to anyone.

However, you could look into how possible it is to put a charge on the property been built/renovated so that you can also be paid off from the proceedings of the house sale.

Perhaps someone more knowledgeable can advice on that.

If there is equity in the property to do that, then wouldn't it be better to cut out the middle-man and advise the "soon to be ex-friend" to take out their own secured loan?