Advise required on formal agreement for lending money between friends

Benson112

Hi there,

Apologies if this is the wrong forum to post in...

My partners mother has come into some money and has offered to pay off my debts and me pay her back a set amount a month.

What i would like to do for everybodies piece of mind is have a formal agreement between us. It is a substantial amount of month therefore i wouldnt want the arrangement to be changed either way (for example if me and my partner split up, i dont want her mother to up my payments or for me to be in a possition to decide im not going to pay anything).

So, my question is. can i draft an agreement myself or would i need some kind of solicitor to do it? Also, what would i need to put into this document?

Thanks in advance for your help.

Benson

Bunnyinthelights

Hi Benson,
I would personally approach a solicitor.
Borrowing money between friends and family is never really a good idea so having a formal arrangement would make it easier not to have bad feelings involved anywhere.

And I'd get her a lovely thoughtful gift as well...

Benson112

I was hoping that wouldnt be your answer lol.

And yes im planning on paying for her season ticket next year as a thankyou :-)

LilDevil

Hiya

I had a similar situation, my sister MIL (quite well off) offered to lend me money to pay debts off, we just had a typed agreement something along the lines of (can't remember exact wording as it's at home):

I XXXXX agree to lend XXXXX the sum of £XXXXX to consolidate the following:

Loan: £XXXXXXXXXX
Credit card: £XXXXXX
Overdraft: £XXXXXX
Catalogue: £XXXXXX

It is agreed that XXXXXX will pay XXXXX the sum of £XXXXX per month starting on DATE, for XXXX months/years (final payment being DATE).


Signed (Lender): .........................

Signed (Borrower): .........................

Date: ...........................



Hope this helps

Benson112

Thats more like what i was hoping to hear lol.

Will this legally stand up though?

LilDevil

If it's signed by both of you, then yes, I think it does. It's usually when money is lent without anything in writing that problems occur (take it from one who knows!!).

You could perhaps check this with the CAB, just to be 100% sure.

Benson112

LilDevil wrote: »

If it's signed by both of you, then yes, I think it does. It's usually when money is lent without anything in writing that problems occur (take it from one who knows!!).

You could perhaps check this with the CAB, just to be 100% sure.

Thanks very much! I will write it up now. Thanks all!!

Benson112

What do you think? I want to include something in there stating that if i make over payments the timescales will adjust accordingly:

Loan Agreement


I xxx agree to lend xxx the sum of £##### to consolidate the following debts:


Loan: £XXXXXXXXXX
Credit card: £XXXXXX
Overdraft: £XXXXXX
Catalogue: £XXXXXX




It is agreed that xxx will pay xxx the sum of £### per month starting on 26th March 2008, for 58 months with the 58th and Final Payment of £### to be paid on 26th December 2012.


If overpayments are made, the above time scale will adjust accordingly. Under-payments are not permitted.

Signed (Lender): ........................

Signed (Borrower): .........................

Whiteness: .........................

Date: .........................

kipwilliams

Benson112 wrote: »

Whiteness: .........................

you'll want to correct that spelling error.

looks good, but the whole 'overpayments' bit could probably do with some clarification. If you're not paying interest then it wouldn't be in your interest to overpay anyway...

Benson112

kipwilliams wrote: »

you'll want to correct that spelling error.

looks good, but the whole 'overpayments' bit could probably do with some clarification. If you're not paying interest then it wouldn't be in your interest to overpay anyway...

lol thats the spell checker on word for you, correcting random things!!

It will be in our interest to overpay as we will clear the balance earlier, i want to be debt free ASAP lol. so if i have a spare £100 at the end of the month ill be transfering it over to get the balance down.

rayday2

Benson I would edit out the names in your post if they are real the internet is open to everyone and you said in the first post they have come into some money!