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  • FIRST POST
    • Fingerbobs
    • By Fingerbobs 12th Aug 19, 3:28 PM
    • 725Posts
    • 285Thanks
    Fingerbobs
    Offering a Loan to a Friend
    • #1
    • 12th Aug 19, 3:28 PM
    Offering a Loan to a Friend 12th Aug 19 at 3:28 PM
    Firstly, apologies if this is the wrong forum for this query. I couldn't see a more suitable one, but I appreciate it's not quite the right topic, so I fully anticipate the post being moved :-)


    A friend was looking to upgrade their mobile phone handset via their network provider, and I pointed out that it would be much cheaper in the long run to buy the phone SIM-free from a retailer, and just remain on their existing mobile tariff.


    As they can't afford the full cost up-front, I've suggested that I could purchase a discounted Gift Card (via my employer's perks scheme), and they could use this to buy the phone and pay me for it at the same rate that they would have paid their network provider.


    Basically, I'm buying them a Gift Card for a specific retailer, and they are paying me for it in instalments over a period of time.


    Obviously I don't anticipate any problems or I wouldn't even entertain the idea, but I would like to formalise this loan on paper, so I would have some recourse should things happen go wrong further down the line.


    Can anyone recommend a free template I can use for the agreement? There are loads out there on the Web, but I don't just want to pick a random one in case it's not "watertight" if you know what I mean.
Page 1
    • newatc
    • By newatc 12th Aug 19, 3:36 PM
    • 447 Posts
    • 561 Thanks
    newatc
    • #2
    • 12th Aug 19, 3:36 PM
    • #2
    • 12th Aug 19, 3:36 PM
    In my experience lending to a friend is a good way to lose both friend and money.
    • zx81
    • By zx81 12th Aug 19, 3:48 PM
    • 23,521 Posts
    • 26,114 Thanks
    zx81
    • #3
    • 12th Aug 19, 3:48 PM
    • #3
    • 12th Aug 19, 3:48 PM
    I wouldn't bother with an agreement.

    Even if you have one, you still need to go through the various legal channels to enforce it and if he doesn't have the money, you still won't get your money back.

    If you lend it to him, just assume you won't get it back. If you do, it's a bonus.
    • sourcrates
    • By sourcrates 12th Aug 19, 3:53 PM
    • 18,230 Posts
    • 17,139 Thanks
    sourcrates
    • #4
    • 12th Aug 19, 3:53 PM
    • #4
    • 12th Aug 19, 3:53 PM
    Before you lend the money make sure you agree exactly:
    • How much you will lend
    • The interest rate
    • The term
    • How much they will be expected to repay each month
    It is essential that you are both aware of all of these conditions before any money is exchanged.
    Write a contract

    Drawing up a written agreement or contract which lists all the agreed terms of the loan makes it clear what you are agreeing to, and also provides you with a record of the agreement should there be any dispute.
    You and your friend should both sign it in the presence of independent witnesses.


    Even doing all this does not guarentee you will be paid back, if the borrower does fail to repay the debt, then the legal system is there for you to use.


    As a warning to you, this forum has had hundreds of such posts such as yours where the debtor bid not repay the lender, and both money, and freindship were lost.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".

    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views expressed are mine and not the official line of MoneySavingExpert.com.

    Helping you deal with problem debt.

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    • Sea Shell
    • By Sea Shell 12th Aug 19, 3:58 PM
    • 2,405 Posts
    • 4,308 Thanks
    Sea Shell
    • #5
    • 12th Aug 19, 3:58 PM
    • #5
    • 12th Aug 19, 3:58 PM
    They should save up and/or buy a cheaper phone!!

    If you're happy to possibly lose your money, your friend, or both, go ahead.

    Agreements are worthless unless you're prepared to go to court to enforce them!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
    • RyanEzio
    • By RyanEzio 12th Aug 19, 5:33 PM
    • 65 Posts
    • 78 Thanks
    RyanEzio
    • #6
    • 12th Aug 19, 5:33 PM
    • #6
    • 12th Aug 19, 5:33 PM
    I wouldn't bother of I was you. Why have a phone so expensive?
    Ryan
    • venison
    • By venison 12th Aug 19, 10:04 PM
    • 3,679 Posts
    • 5,153 Thanks
    venison
    • #7
    • 12th Aug 19, 10:04 PM
    • #7
    • 12th Aug 19, 10:04 PM
    Friends/family and money never mix well.
    "You have to wait for all the good things in life, and then they don't last long"
    • foxy-stoat
    • By foxy-stoat 13th Aug 19, 7:55 AM
    • 4,857 Posts
    • 2,884 Thanks
    foxy-stoat
    • #8
    • 13th Aug 19, 7:55 AM
    • #8
    • 13th Aug 19, 7:55 AM
    Can anyone recommend a free template I can use for the agreement? There are loads out there on the Web, but I don't just want to pick a random one in case it's not "watertight" if you know what I mean.
    Originally posted by Fingerbobs
    Apart from receiving answers to questions you didn't ask, all correct by the way, if you have found a free template then use it if you feel you have to. Nothing will be "watertight", and I do not know what you mean. Unless your in the business in loaning money, and have the resources and time to chase people down for ever to get your money back then forget about trying to formalise this loan. We will see you in a few months when your friend stops paying you and you start asking questions about claiming your money back.

    Good luck, you may need all of it.
    • Fingerbobs
    • By Fingerbobs 13th Aug 19, 12:15 PM
    • 725 Posts
    • 285 Thanks
    Fingerbobs
    • #9
    • 13th Aug 19, 12:15 PM
    • #9
    • 13th Aug 19, 12:15 PM
    Thanks all for the advice.


    I have taken all this on board, and thought very carefully about the consequences, and reached the conclusion that it's not worth it. It's none of my business if they want to pay for a stupidly expensive phone - that's up to them - but they can just pay for it via their contract as they were planning to do anyway. I just thought I could save them some money, but it's not worth the potential hassle further down the line if things go pear-shaped.


    Thanks.
    • tealady
    • By tealady 13th Aug 19, 12:52 PM
    • 3,125 Posts
    • 4,054 Thanks
    tealady
    There is a very old saying which goes something like this.
    "Never lend people money that you cannot afford to lose"
    You made the right decision IMO.
    Proud to be an MSE nerd
    Judge people by their achievements, not by their mistakes
    • Quxala
    • By Quxala 14th Aug 19, 10:07 AM
    • 3 Posts
    • 0 Thanks
    Quxala
    never bind friends and money, it will ruin your friendship.
    • TripleH
    • By TripleH 16th Aug 19, 6:41 AM
    • 243 Posts
    • 167 Thanks
    TripleH
    Well done fingerbob forvat least thinking of and trying to help a friend save money. Hopefully your friend may deep down have a lightbulb moment and if they have to have the latest phone, mightvthink about creating a fund to save up for the next one.
    Wherever you go, whatever you do Richard Marx is right there waiting for you.

    Sweet dreams!
    • maisie cat
    • By maisie cat 16th Aug 19, 8:03 AM
    • 748 Posts
    • 927 Thanks
    maisie cat
    When you lend money to a friend that is the price you are paying to find out whether they are a true friend or not.
    • thebigstillmeister
    • By thebigstillmeister 16th Aug 19, 8:08 AM
    • 170 Posts
    • 145 Thanks
    thebigstillmeister
    If the stupidly expensive phone is an Apple one, then the Apple store do finance via Barclays,
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