Advise required on formal agreement for lending money between friends

Benson112

Good thinking rayday...bit of a daft momeny there! Thanks

rayday2

No problem sorry I can't help with your actual question. I do know someone who went through small claims court to get a debt paid between friends and all they had was a scribbled bit of paper so think you are along with right lines.

Make sure any witnesses are not directly related to either party signing if that makes sense, just as a bit of a crossing t and dotting i exercise!

tyllwyd

What do you mean by 'the time-scale will adjust accordingly'? I can see what you are getting at, but if you are trying to draw up something to avoid potential disputes, it seems daft to include a phrase as vague as that.


Perhaps you should include something along the lines of 'the total amount repayable is XXXX' to make it clear that there is no interest to be added. And something along the lines of '58 payments £XX to be paid by standing order, with additional ad-hoc payments permitted. The final payment will be on 26 December 2012 or when the total amount repayable has been paid.'

If you are intending to pay extra, I think you and your lender should come to a clear agreement on how you are going to record money paid/received. I can imagine that if you, say, gave them a cheque for £100 in the summer, by the time it comes to four years later it would be very easy for them to have genuinely forgotten all about it. Maybe if they set up a separate account to receive the money, you could both look through the statements each year to check you agree. I think the easiest thing would be just to stick with the one payment though, at least then you both know where you stand.