Loan from a friend... contract question

K80_Black

I agree with foxy-stoat - not taking out a high APR loan is very wise, especially if it was a guarantor loan that could leave your guarantor in the same situation as just loaning you the money in the first place.

You can put everything you want to into place with documents drawn up and the rest - but at the end of the day, the only way you'll lose a friend over this is if you default on the loan then refuse to give up the car. I've loaned friends money before, and been stung - and been repaid in full and on time. It's all down to the person loaning the money from me, not anything that I have said or done before, during or after they borrowed money.

robatwork

As all the risk seems to be with your friend - you will have the money AND the car, then I'm not sure why everyone is so against it.

I guess the collective mind is trying to protect your friend as we have so many people posting here from their position in a couple of years time, when you have defaulted and won't talk to them any more.

Although this is likely, it depends on your character, and your health.

You're doing the right thing avoiding the ridiculous interest rates, and as long as you have a backup plan (what if you get too ill to work?) then I don't see why this is automatically a terrible idea.

Ideally you'd give them some security until it's paid (valuables.....car keys.....or as said above register the car owner in their name). Written contract is a great idea too.

glennstar

robatwork wrote: »

As all the risk seems to be with your friend - you will have the money AND the car, then I'm not sure why everyone is so against it.

I guess the collective mind is trying to protect your friend as we have so many people posting here from their position in a couple of years time, when you have defaulted and won't talk to them any more.

Although this is likely, it depends on your character, and your health.

You're doing the right thing avoiding the ridiculous interest rates, and as long as you have a backup plan (what if you get too ill to work?) then I don't see why this is automatically a terrible idea.

Ideally you'd give them some security until it's paid (valuables.....car keys.....or as said above register the car owner in their name). Written contract is a great idea too.

Reprobate,
Worst advice ever!!.. and completely counter to your usual sage contribution.

robatwork wrote: »

Written contract is a great idea too.

I don't think so. Likelihood of enforcement to everyone's satisfaction? ZERO!!

Herzlos

If you really must, borrow as little as possible to get the cheapest usable car as possible. Give the friend the V5 and a spare set of keys so that if you default he can take the car back, transfer it into his name and sell it on to recover some money.


Then pay him back as quickly as you can.

[Deleted User]

OP you could direct your friend to MSE let them read the horror stories for them selves, as others have said you seem to be a high risk (49%apr).

silverwhistle

When I moved back to this country I didn't have a car. For the short term I borrowed a friends old car (and paid the excess insurance). I then bought my own for £4k, which I could pay from cash, and five years later it's still going strong. If I'd been short of money I'd have bought a cheaper car to keep me going.



Can't you scrape together a grand, or pay on a credit card. 49%APR for a loan suggests maybe you can't, but borrowing from a friend I suggest is the last option you should take.

BrassicWoman

lots of good ideas here. I'll thank you for them even though the OP has dissappeared without doing that!

AdamFrankie

Do it the way banks deal with this kind of situation. You need to buy a car and for that your friend is lending you the money fine. Make sure you make a proper signed contract and register the car on his name. You can have the authority to drive and the contract that with which he cannot take the car. All you need to do is pay the amount on time.

robatwork

Indeed my normal advice is that you lend money to a friend and you lose money, and lose the friend.

But it has happened, in the history of friends borrowing money from friends, that friend Y pays back friend X on time in full.

None of us here can say what percentage of loans like this go wrong, or indeed what percentage of bank loans don't get repaid. It's not something we'd do or recommend, but from the perspective of a genuine OP it's disingenuous to assume that without doubt she won't repay a loan.