Lending money to friends & family

JPhoenix

Virgin money offers a service that enables friends and family to loan money to each other. The beneficial thing is that payments are made through Virgin Money at a rate and amount agreed upon upfront. A promissory note is signed in advance and it is just like getting a loan from bank. It seems to be a good way to help loan money to friends and family without the risk of them wiggling out of their obligations. Effectively, Virgin Money works just like a peer to peer lending network, but I'm not sure if they operate in the UK.

BabyBetty

Just found out that a close friend took out a loan of £12,000 for her sister and also lent her £6,000 (which she had in cash). The sister is paying back the loan each month. Also my friend has a credit agreement for a course for £4,665 which she has to pay by August 2009 - if she does not pay this in full the cost goes up to £9,665, with payments of £200 until it is paid off. My friend was hoping to get a loan to pay off the £4,665 before the due date but got declined on 3 credits cards.

There is another issue that she is very likely to be dismissed on 8th May 2009.

I actually thought of helping her with the loan situation by dumping her debt on one of the cards that I don't use. Whilst I have know her for 35 years, I am trying to deal with my own debts and trying to keep focused.

As much as I love her, I feel that she needs to deal with the situation herself. I will be there to support her but not financially.

love2shopforbargains

My gran always said to me "never a borrower nor a lender be"
I love this saying. I try to live by it as I know it is for the best. I use credit cards but pay them off in full and on time, and only really use them if I need the extra protection that they offer. I don't have any debts and have a bit of savings, so I suppose I am one of the lucky ones.
I occasionally loan money to my family, but this is paid back on time or if there is a problem they let me know and even then it is only small amounts, the most it has been is £300.
As someone previously said we can't pick our family.

thriftymomma

So sad that so many of you have been taken advantage of by those closest to you. :-(

duggie1982

My sister has the same problem. Used argos card to buy a friend a suit as hers was broke last october. Now the money is due as it was buy now pay later. She is now ignoring her phone calls and texts and when she shows up at her house her boyfriend says she's not in. I called for my sister as the argos card is mine and i let my sister use it for this purpose. Her friend said she was sorry and was meant to get back to her and she said would call her etc. Still no word. I know this is my sisters problem to pay me now but i sent the girl a text saying no point ignoring me as now wont answer my calls and said as i know you get paid on a Thursday i will be at her house every thursday for a payment. I just feel as its over £800 i need to pay then she should pay up. Last resort is taking the couch of her but not sure if i can do that although i have a receipt saying i paid for the couch and had it delivered to her house.

BillTrac

Local paper here in Portsmouth reported yesterday that a loan shark "who only lent to friends and colleagues" has been told to pay £330k to the courts within a few months or go to jail. In some instances he was charging his "friends" 11,000% interest.........yep eleven thousand.........ouch

duggie1982

So does anyone still have any letter templates to send to a friend which sounds official?

marycoco

Can anyone tell me if you stand Guarantor for someone and they pay the loan, will this effect me applying for my own loan future while this loan is still live.

techmax76

I've been to this situation so many times. I lend thousands of money and never get it paid. I have learned my lesson I never trust anybody in terms of money lending. I see to that it is written in black and white.

Rupert_Bear

techmax76 wrote: »

I've been to this situation so many times. I lend thousands of money and never get it paid. I have learned my lesson I never trust anybody in terms of money lending. I see to that it is written in black and white.

At what thousand did you decide you would never get it back?