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Lending £10k, how much to pay me back?

2

Comments

  • cogito
    cogito Posts: 4,898 Forumite
    Will the banks lend money to your relative? If they won’t take the risk, why would you?
  • gord115
    gord115 Posts: 1,067 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Sea_Shell wrote: »
    Also, have you now paid off your £11k outstanding loan you had back in January 18? Wasn't the money in your Santander account ringfenced for that??

    Personally I wouldn't lend any money to anyone, if I still had debt myself. Do you?

    Yeah paid it back after three months,now have zero debt.:T
  • gord115
    gord115 Posts: 1,067 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Sea_Shell wrote: »
    I hope it all works out for you, but you only have to read these forums for a while to see all the tails of woe about loans not being paid back. Just be aware, that there is a chance you won't get it all back.

    Why do they need the money? Are you sure they have the spare cash to pay you back each month? Can you afford to write off this money if they don't pay you back?

    If you're still intent on lending, at least get something in writing stating all the terms, then both sign it.

    Good luck!

    There is absolutely no doubt I will get the money back. I just want to save someone some interest.
  • dealer_wins
    dealer_wins Posts: 7,334 Forumite
    gord115 wrote: »
    There is absolutely no doubt I will get the money back. I just want to save someone some interest.

    Do think of it as a gift though, just in case the worst happens. It happens over and over again as evidenced by the numerous threads on here!!
  • gord115
    gord115 Posts: 1,067 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    ctdctd wrote: »
    Not strictly true, given that capital is reducing throughout the loan.


    I make it £215 per month for £10,000 @ 1.5% repayable over 48 months.

    Thanks, that's about the amount I had calculated,wasn't sure though
  • Malthusian
    Malthusian Posts: 11,053 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    gord115 wrote: »
    There is absolutely no doubt I will get the money back.

    Nobody asked whether you doubted it or not. The question was why your relative can't borrow money from a bank and/or a 0% 24-month credit card deal.

    Nobody who lends relatives money interest-free has any doubts they'll pay it back (if they did they'd either charge interest or immediately write it off to zero and treat it as a gift) and yet large numbers of them still lose their money.
  • aroominyork
    aroominyork Posts: 3,153 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Gord – your wish to save your relative from paying higher interest is very kind but, like others, I really suggest you think twice about this. Lending money to people you know is a little like investing in a rising stock market: it seems safe at the time but it’s only when the market turns that you truly grasp the downside. If your relative asks to skip a payment what will you say, and when you say ‘OK’ once (because that’s the easiest answer to give) it risks becoming a habit.

    I have only lent money to people twice, a couple of hundred for a few weeks. Although they both paid me back at the end of the month like they said they would, it was only when the money left my account that I wondered what I would do if they could not repay me. If your relative has options to take a loan commercially, that might be best for you and for your future relationship, once you’ve decided how to explain your decision to them.

    My wife’s father used to say “as soon as you lend money to someone you become a b@stard”. I can see how that happens.
  • pearl123
    pearl123 Posts: 2,072 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Don't lend money, unless you can afford to loose it.
  • gord115
    gord115 Posts: 1,067 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Thanks everyone.
  • redux
    redux Posts: 22,976 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 18 May 2019 at 8:49AM
    If the relative was to borrow at the best advertised loan rates, this would only cost them £6 or £7 a month more than the arrangement with you.

    @1.5000% 214.78
    @2.8525% 220.69
    @3.2511% 222.45

    That's about two cans of beer at home instead of in the pub

    And why compare to Santander, when you can find 2.5 to 5% elsewhere for some of this?

    @2.5% 219.14
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