Should I get a signed letter/contract for lending £3k to a colleague?

macman

It's still a contract, whether in writing or verbally. Exactly the same, legally. But having it in writing enables you to prove what was agreed.
That, however, does not mean that it will ever be repaid. Plenty of threads on here show the folly of lending to friends.

HobgoblinBT

Don’t lend the money.  

 

If banks who make lending decisions all day every day don’t see your colleague as a good risk and wont lend the money, is that not a red flag?   

 

Make a gift of the money by all means, but lending money to friends or family often ends in tears.  

PRAISETHESUN

+1 for not lending the money, especially as you say you can't afford for it not to be repaid. No piece of paper can "guarantee" that you will be repaid. At the end of the day you need to have your priorities in order, and in this case looking after yourself should come first.

Claddagh_Noir

chris112 said:

Does anyone know of the correct structure and contents to produce a letter for a loan I am making to a colleague

i do trust them but this is just as a security in the event of us falling out or for any other reason that may jeopardise thei repayment 

It will be fo r.£3k so can't afford to risk i was told by someone in the past though The legal validity you may have goes out the window if you don't have the debit in writing and signed 

Personally??  I would not risk it.  I would not be surprised if this colleague of yours serendipitously  finds another job, hands in their notice and disappears for dust when you expect the first few payments!!

I would never lend a vast amount of money to anyone if the bank refuses them.  How would they include me in their budget to repay me if they cannot manage their current finances as it is?   They would be lucky to get a red cent out of me! 

mjm3346

chris112 said:

Does anyone know of the correct structure and contents to produce a letter for a loan I am making to a colleague

i do trust them but this is just as a security in the event of us falling out or for any other reason that may jeopardise thei repayment 

It will be fo r.£3k so can't afford to risk i was told by someone in the past though The legal validity you may have goes out the window if you don't have the debit in writing and signed 

Unless you can afford to lose the money don't lend it  - doesn't have to be a "falling out" to lose it, their circumstances may change beyond their control and if they end up insolvent your piece of paper can effectively become worthless

Voyager2002

Nifty_Purse said:

A legal agreement can only really protect you if it is drawn up by a solicitor. 

In this kind of situation, using a solicitor would make no difference. Most people could write a letter that clearly stated how much was borrowed and when it was to be returned, and that is all that a solicitor would do. The main problem is that if he fails to make the payments as agreed, the police would not get involved and using court procedures would be expensive and probably not effective.

I agree with your main point: best not to lend the money at all if the OP cannot afford to lose it.

sammyjammy

Obviously I don't know who you work for but lending money/borrowing from a colleague could be frowned upon.  In my place of work it would be a sacking offence.  Don't do it, the need to borrow a sum of money like this from a colleague smacks of desperation, not good.

poppy10_2

Got to echo everyone saying do not do it. I lend a sum to a close friend and colleague. Defaulted on repayments within a couple of months. Lost the money and the friendship

[Deleted User]

sammyjammy said:

Obviously I don't know who you work for but lending money/borrowing from a colleague could be frowned upon.  In my place of work it would be a sacking offence.  Don't do it, the need to borrow a sum of money like this from a colleague smacks of desperation, not good.

I would strongly suggest against it but also you describe them as a 'colleague' not a friend; this would be a red flat to me. This may risk your/their job and sour relations at work if they don't repay.

jimpwarsop

Its better to give than to lend.

And usually it costs the same.

D

Dont lend them a bean.

And the good old one "I lent a bloke £20 once, havent seen him since.    Best £20 I ever spent"