Lending Money to a friend question

mattw89

Although its probably not advised to lend a friend money as it can create ambiguity between the parties etc. I want to lend a friend only around £200-£400 but I wondered if there was anything I could do to secure the deal so he had to pay me it back.

I'll explain. I'm a 19 year old student, as is he. I've known him since I was 11 and he's a best mate so theres no issue of trust. He's got no money and he's not got any until his next loan installment on 31st March, so I thought I'd like to lend him the money until then because I have plenty of money spare in my interest free overdraft.

But i wondered if i could just kind of form some kind of contractual agreement that could be used? Or should i get him to give me a post dated cheque or something?

Thanks,
Matt

It could be argued that if i trust him that much, I shouldnt be thinking about this. But it's always nice to have a contingency plan so just wanted advice.

jonesMUFCforever

Why does he need the money? Has he no family or bank overdraft?

If a bank has refused to increase an overdraft then that might be a sign that he is over committed.

By all means lend to him if you really want to but
1 Be prepared to lose the friendship when he does not repay and,
2 Could you afford to lose the money?

If the answer to above is no - don't do it.

bathgatebuyer

Most important rule of lending to family or friends?

Do not lend money that you cannot afford to lose

ClaretHead

If he's got no money, then £200 to £400 is not much to keep him going till 31 March. So he may need to borrow more from you or from someone else. Then when 31 March comes around he will have most of his loan spoken for already,

If he's a good mate he may then pay you back, but then be struggling a month or two later. If he's not such a good friend, he may not pay you back.

If you value him as a friend, then you may be better off just giving him some money, or buying him meals or clothes.

If you want to set up contracts etc, it doesn't say much for the friendship

sarahlouise210

If he has no money then when he gets his loan payment he will have no money AGAIN once he has repaid his debts (as above - £200 - 400 wont go far..he will probably borrow more, if not from you elsewhere)
If you are a real friend you will not lend him this money that can only get him further in debt.

dgwebster

I remember making £240 stretch 4 months as a student. granted that doesn't include heating and a place to stay, but for travel, daily commodities etc.

I do have to agree with what everyone is saying though that in him needing to pay it all back come next installment, it will pretty much end up back at square one.

also, i appreciate that this may not apply to you or your friend, but im willing to hazard that even if you GAVE the money required to live off of without needing to pay it back, come pay day with the next installment, he will be so happy to be off poverty line, it will disappear within a few weeks (I spent near £1100 in 8 days like this)

Even now in my older life I fell into this trap and had to get my parents to bail me out month after month as I paid it back but needed to borrow it again at the end of the month. after 6 months of this I came clean and asked for straight out help. They offered to pay one of my loans for 2 months, which got me on the right cycle. Moral to the story: the person needs to really want onto the right cycle and you need to be prepared to loose the money.

TEDDYRUKSPIN

ANSWER!

DON'T BORROW TO FRIEND WITHOUT LEGAL AGREEMENT!

You won't get it back if it goes the wrong way!

Keeping_Positive

Ive lent money to good friends twice, first took a long time to get repaid and the second friend has stopped contact.

Andy_Hamilton

I would lend money to family only.
If you want to lend money to your friend make a simple reciept.
State:
Amount loaned
TO who
From who
When money handed over preferably via bank transfer.
when payment expected back.
Signed and dated by both parties.

If you get it back in installements give a reciept per payment.

lilac_lady

Don't do it. You become the "bad" one for asking for it back. Many friendships end over money.

homer_j_3

Tell him to get on slicethepie.com (details on up your income board) and do the scout rooms, if he can spare 3 or 4 hours a day and likes music, you should be able to make about £5 a day this way. I know it seems a lot of work for little money but £35 a week and we are about 6 weeks away from end of march and that will be the £200.

If you are a friend, you could say that you will match whatever he earns as a loan - with the minimum being he has to hit £5 before you will do this.

He will learn that he can earn money to a least feed himself. Poor money but if it helps him get on the right track financially then you are seeing a commitment that he wants to get himself on the right track and if he has no money, he should have the time to do this.