Should I help or not

beemarman

Hello,

First post.

I have a friend who is asking if I could help him get a loan from my bank.

He's a good friend and I believe he would pay back. A few years ago I found out he had some loans and credit cards with very high interest rates. I agreed to borrow him £12,000 from my savings. He paid it all back with missing any payments.

About 18 months ago he came back asking me to borrow him another £9000. I said no, as I didn't have it then. Last week I went to see him and he was complaining about he's outgoings and that he is finding it difficult to really keep up with he's debts. He told me, that after I said no, he went to another high street lender and took at a £10k loan with 33% APR. I felt really bad because I could have helped him if I really wanted to.

The main reason for needing the money is complicated and long. But, it's due to him trying to sort out Immigration for him and he's family.

The big question is, should I borrow him the money? What should I have in regards to documentation to try and protect myself just in case he can't, or wouldn't pay back?

[Deleted User]

beemarman wrote: »

The big question is, should I borrow him the money?

No. And don't lend it to him either.

System

No, don't lend it to him. Even if you have the most water-tight legal agreement there is it won't guarantee you get your money back if he doesn't have it and doesn't have enough assets to seize to sell to cover the debt and it'll cost you time, money and stress to try to get it back.

CakeCrusader

beemarman wrote: »

Hello,

First post.

I have a friend who is asking if I could help him get a loan from my bank.

He's a good friend and I believe he would pay back. A few years ago I found out he had some loans and credit cards with very high interest rates. I agreed to borrow him £12,000 from my savings. He paid it all back with missing any payments.

About 18 months ago he came back asking me to borrow him another £9000. I said no, as I didn't have it then. Last week I went to see him and he was complaining about he's outgoings and that he is finding it difficult to really keep up with he's debts. If he can't keep up with his debts do you really think he'll pay you back? He told me, that after I said no, he went to another high street lender and took at a £10k loan with 33% APR. I felt really bad because I could have helped him if I really wanted to. It's not your responsibility to help someone else manage their finances.

The main reason for needing the money is complicated and long. But, it's due to him trying to sort out Immigration for him and he's family.

The big question is, should I borrow him the money? Only if you can afford for him not to pay you back. What should I have in regards to documentation to try and protect myself just in case he can't, or wouldn't pay back?

You'll be much better off getting your friend to post a SOA on here and getting him some help with his finances. He's shown time and time again that he's not that good with cash and you've said yourself that he can't keep up with the debts that he already has. Swapping these over to you isn't going to help either of you. I'm not meaning to sound harsh, but the best help you can give to someone is to point them in the direction of professional help (like Stepchange). If he goes to see the CAB, for example, they can (in some occasions) negotiate a freeze in interest rates.

Ebe_Scrooge

As ZX81 says, don't. If he doesn't pay you back, there's not much - in reality - you can do to get the money back. There's a reason why high-street lenders (not "borrowers" !) are charging such a high APR - it's because they know there's a good chance he won't be able to pay back what he owes.

DigForVictory

+1 for please don't lend him money & get him on here instead.
You were very fortunate with the first loan - please do not lend him any more.
That 9K in debt either materialised really fast or just wasn't mentioned before - either way, family or not, he's much better as someone else's risk. He has not learned better ways from your kindness, so stay kind & require him to learn.

stripeyfox

If you want to lend it to him then that is up to you. But there is a very strong chance you won't get all, or even any of your money back. And you will probably lose your friendship in the process.

If he cannot borrow from the bank and is resorting to asking friends for loans then he is probably seriously un credit worthy. He may well have good intentions of paying you back and probably will start off doing so.

Lending to friends and family should be treated as a gamble. If your conscience compels you to help these people then you should expect NOT to receive the money back. If you do, then it's a bonus but WHEN they stop paying you back, there is very little you can do except write of the money and the friendship

beemarman

CakeCrusader wrote: »

You'll be much better off getting your friend to post a SOA on here and getting him some help with his finances. He's shown time and time again that he's not that good with cash and you've said yourself that he can't keep up with the debts that he already has. Swapping these over to you isn't going to help either of you. I'm not meaning to sound harsh, but the best help you can give to someone is to point them in the direction of professional help (like Stepchange). If he goes to see the CAB, for example, they can (in some occasions) negotiate a freeze in interest rates.

I did tell him about Stepchange. He said he would let me know if he would like to proceed with this.

I believe he would prefer it if I just borrowed him the money Instead of going through to some type of debt management solution.

beemarman

stripeyfox wrote: »

If you want to lend it to him then that is up to you. But there is a very strong chance you won't get all, or even any of your money back. And you will probably lose your friendship in the process.

If he cannot borrow from the bank and is resorting to asking friends for loans then he is probably seriously un credit worthy. He may well have good intentions of paying you back and probably will start off doing so.

Lending to friends and family should be treated as a gamble. If your conscience compels you to help these people then you should expect NOT to receive the money back. If you do, then it's a bonus but WHEN they stop paying you back, there is very little you can do except write of the money and the friendship

At the moment I really can't afford to lose £9k, so going to have to say NO!

Money_maker

If you keep bailing him out then he'll never get himself out of debt. Don't be daft.

heartbreak_star

beemarman wrote: »

I believe he would prefer it if I just borrowed him the money Instead of going through to some type of debt management solution.

I bet he would. That's exactly why you shouldn't do it.

HBS x