MONEY MORAL DILEMMA: Would you lend to a friend in need?

Tricky_Vicky · 7 December 2006 at 10:57AM

I've got a similar situation with my son - not as much money - he's got bailiffs knocking on the door for about £500, but he finally came clean this week that he owes about £3000 in total. I have paid off the bailiff for him because I don't want him to be thrown out of his flat. BUT, thanks to this site, I know about the Consumer Credit Counselling service and I have referred him to them. I want to help him, but he must also learn that there is a consequence to his actions and has to accept that he needs help to solve the root of the problem, not handouts. I have also given him a copy of Martin's Money Diet - it will take him a long time to read it as he is dyslexic, but I really hope he can turn this situation around.

rbakker · 7 December 2006 at 11:06AM

It's very easy for those without money to say that they would lend it if they had it. I've lent money to 7 different people and the lessons I've learned:

1) Always charge interest
This gives them the motivation to pay it back quickly; it's good moneysaving practice to pay back the loan with the lowest interest last.

2) Don't lend it to people to get them out of a "tight spot"
In 3 of the 7 cases above this was the case, and all 3 times I never got the money back; with the others I was giving them a loan to eg help build a house because the bank was refusing to do so.

3) Insist on regular repayments immediately.
No matter what they tell you, no matter how sincere they are about paying it back, this is so easily pushed to the back of their minds. Especially if you have enough money yourself they start to think "well, he doesn't need it". Ten years I've been waiting for some of these loans.

Now it's on again. A very good friend is getting into a debt spiral because her income is so close to her outgoings (mainly debt repayments) that she can't afford to eat. If I were to pay off all her debts and then have her pay me back 50 pounds a month forever (the mythical "one easy payment") then her problems would be solved. Or would they? Unless she changes her habits then it will just happen again.

My advice: just say no. Say it immediately. Say it every time. Don't hesitate. They'll understand, if they're true friends, and try it on someone else. Helping someone else gives you a good feeling, but it's not worth it.

HappySad · 7 December 2006 at 11:24AM

I have lent to others close friends and family. My person conclusion is. Give her the money and don't expect it back .. if you are OK with this then go ahead. She got into this situation in the first place because she cannot pay back others like banks/credit cards/morgages and that shows that she is not able to do the same for you.

My sister bought a very large flat screen TV then 2months later asked me for money to buy a deperately needed car. So I said no. She will then learn or not that she has made her own financial decisions so she will have to live with this.

Lent to others who can give good reasons why they can go down the pub every week and holiday and still not be able to pay me back my own money.

If someone is asking to borrow money from me I would not always say no. That way the person will learn from their mistakes.. if you bail them out all the time then they will not learn the lesson.

Those who have saving work really hard to earn and save that money and some people (not all) can spend their money on luxuries and not essential stuff and then want to borrow money to help them out.

If someone asked to borrow money then refering them to a financial advisor or to their own parents would be what I would do. I personally don't have money to give away.

TheAble · 7 December 2006 at 11:45AM

I wouldn't lend the money. £10K can take ages to save up and at the end of the day, it's unlikely she's gonna pay you back.

I'd rather lose the friendship. After all, in the words of Gordon Gekko: "If you need a friend, get a dog."

nappentass · 7 December 2006 at 11:56AM

My personal attitude is don't lend more than you can afford to lose.

I have lent money before and it's not been paid back. I have been irresponsible with money and have done stupid things like borrow money to lend to friends - I was extremely lucky that that person is a good friend and was repaying me and fortunately came into a position to replay me in full... but it was a stupid irresponsible thing to do and created a sick dependency with that person.

I now have a more realistic attitude to money, after a lifetime of self deception, lack of self worth and self belief, I finally have done the self examination to deal with that a face my situation honestly. My belief is that generally if someone is not good with money, throwing more money at the problem will only cause temporary relief and the real issues is likely to be that persons attitude and beliefs about life and money, until these are changed then they are likely to repeat the same behaviour and end up in the same situation again - I now I did repeatedly!

I now would not lend a friend anything unless I could afford to give it to them.

I am very thankful that my partner is a good person because we were both made redundant and I am still out of work and now he's got a job is supporting me and the debts that are in my name (one because he had a poor credit rating and could not get a fair interest rate, I took it in my name).
Bless him

Tamiss · 7 December 2006 at 11:58AM

NO. I don't think you should ever lend to friends. If you can afford to give, that's fine, but repayment cannot be relied upon. Jane's friend has a history of poor money management, and although she won't like being refused, lending money is more likely to end the friendship in the long run. I made the mistake of lending to friends when I was younger and they all fell into one of two categories. Half didn't care about repaying me - the fact that I'd had it to lend in the first place proved to them that I could afford it. The other half felt so bad about owing me that they either avoided seeing me or spent all their time around me offering apologies and excuses, even when I was happy not to mention it - this didn't make them the best company. The friendship always suffers ultimately.

If you can afford to give the money (although it has been clearly stated that Jane can't) then go for it. The friend can always give it back if they really want to.

purplefirth · 7 December 2006 at 12:38PM

A few years ago I lent my life long best friend some money to buy a car that she desperately needed on the pretext that she would pay it back in 3 months as I needed it to pay a deposit for rent. As you can guess I didn't get the money back in 3 months and in turn had to borrow the money off my parents to pay the deposit. We were living at the time at opposite ends of the country, her in Aberdeen and me in Brighton, the phone calls got less and less and then stopped. Eventually I decided to phone her mother (bare in mind we were both in our late 20s early 30s) to get her on the case,which worked fortunately. A year after lending the money her mother paid me the loan back BUT sadly neither my so called friend or I have spoken to each other since. So if you want to keep your friends no matter how much you trust them DONT LEND THEM MONEY something very strange happens when you do!

aubergine · 7 December 2006 at 12:45PM

In this case, no. The old adage 'neither a borrower nor a lender be' I think is very true. If refusing ends the friendship so be it, I don't think a true friend would ask for the loan. The chances of repayment look slim, so the debt hanging over them would kill the friendship even more surely.

This woman has to confront the position she has got herself into, take responsibility and learn how to deal with money. The best thing a friend could do is help her deal with her problem sooner rather than later, rather than watching her own £10k disappearing with everything else.

Ali_UK · 7 December 2006 at 12:59PM

I'm so glad to see so many 'no' responses on here. I'm currently watching one of my parents life long friendships disappear down the pan because my dad lent his friend 10k three years ago to help him out of trouble with the tax man. He got 3k back within six months but the rest? Not a whiff....and of course the guy hasn't told his wife the true extent of the problem and she is still spending money like there's no tomorrow.

My parents are at the stage now where they are having to think twice about booking a holiday because they don't have that spare cash they should have had...or the interest they could have made on it. It makes me mad that they could abuse my parents kindness and friendship like that.

JayD · 7 December 2006 at 1:01PM

I wouldn't lend to a friend - or anyone else I think.
But I would give as much as I could afford to part with and help her as best I could with seeking professional advice and help.
It may be that my money could buy the help she needed to get her out of financial difficulty - in the short and the long term.
So 'no' to a loan' but would give the most I could afford as a gift with 'seeking professional help and advice strings' condition.

MONEY MORAL DILEMMA: Would you lend to a friend in need?

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