Lending money to friends

A mate of mine has just been declined a loan for a new car. When he told me this I told him I could lend him the money and at a better rate of interest than he was offered.

When I've lent money to mates before, 9/10 I haven't seen it again (although it's always been less than £100 so not too bothered). However this is a much larger amount of money and I am worried that although he has the best intentions of paying it back now if for whatever reason he couldn't pay me back one month then it turn nasty and I could lose a mate out of it. Am I right in saying under no circumstances should you loan large amounts of money to mates? Plus I've heard it's illegal to charge interest on loaned money, is this true? Normally I wouldn't but I can easily get about 5% if I lock it away for a year.

20 Comments

You're asking for trouble lending him the money, and you know it!

I told him I could lend him the money and at a better rate of interest … I told him I could lend him the money and at a better rate of interest than he was offered.When I've lent money to mates before, 9/10 I haven't seen it again



Rather you than me :?

I'd put the money in a high interest saving account, if I were you.


Saying that I give a lot of money to my family who earn a lot more than I do, but I don't expect it back.

Banned

so you already told mate you would lend him the money and now your saying your not going to, maybe already lost a mate - lol

I don't think I would to be honest but if you can afford to lose it maybe but I would put it on a legal footing to be sure. Not to sure about the intrest side of it but if the paperwork is drawn up I can't see a problem with this unless the interest rate is to high and it looks as though you maybe a loan shark

Dont do it!
Ive lent money to friends in the past and has been a nightmare to sort out!

I once sold some dvds to a friend at work - only £50's worth but was a lot to me - never got it back - he always had some 'problems' getting the money
Also lent £50 to a friend, got £10 back but nothing more - i dont see her often so i shouldnt have lent her really!

Another, was i sold something on ebay for a friend, then had to give a refund (not as described - or lost in post, cant remember) and have spent over a year trying to get it back from him - still owes me the £330. - ill get it soon.... aparently

Its been ok some times but not worth the risk of losing the money or the friendship!

tbh i really wouldnt bother not worth the hastle.

Neither a lender nor a borrower be

The fact that he has been declined a loan should tell you something.

can you lend me £200 mate? i promise to pay it back

No no no no no no no no no no no no no no no no no no no no no, you get the idea.

Also, the same applies to brothers and mothers - almost forgot.

krazykel;6289272

Dont do it!Ive lent money to friends in the past and has been a nightmare … Dont do it!Ive lent money to friends in the past and has been a nightmare to sort out!I once sold some dvds to a friend at work - only £50's worth but was a lot to me - never got it back - he always had some 'problems' getting the moneyAlso lent £50 to a friend, got £10 back but nothing more - i dont see her often so i shouldnt have lent her really!Another, was i sold something on ebay for a friend, then had to give a refund (not as described - or lost in post, cant remember) and have spent over a year trying to get it back from him - still owes me the £330. - ill get it soon.... aparentlyIts been ok some times but not worth the risk of losing the money or the friendship!



cant be very good friends

Original Poster

nikkib123;6289318

Don't do it!!! Really not worth it plus why was he declined by the bank … Don't do it!!! Really not worth it plus why was he declined by the bank in the first place?



They told him it was because he had an outstanding debt but he has since paid it off.

sassie;6289263

so you already told mate you would lend him the money and now your saying … so you already told mate you would lend him the money and now your saying your not going to, maybe already lost a mate - lol



I told him I "could" not that I "would" and we're still good mates. We might even share a house together next year.

mikebike;6289271

I don't think I would to be honest but if you can afford to lose it maybe … I don't think I would to be honest but if you can afford to lose it maybe but I would put it on a legal footing to be sure. Not to sure about the intrest side of it but if the paperwork is drawn up I can't see a problem with this unless the interest rate is to high and it looks as though you maybe a loan shark



Obviously a written agreement would be written up but I have a feeling it's a illegal to charge interest on loaned money.

Marina;6289261

I'd put the money in a high interest saving account, if I were you.Saying … I'd put the money in a high interest saving account, if I were you.Saying that I give a lot of money to my family who earn a lot more than I do, but I don't expect it back.



Most of my money is locked up in various savings accounts but I had some available sitting in a (lower) variable interest account.

Babbabooey;6289239

You're asking for trouble lending him the money, and you know it!



I had my doubts about doing it but I guess the general consensus has made my mind up now :thumbsup:

Original Poster

abomination;6289370

No no no no no no no no no no no no no no no no no no no no no, you get … No no no no no no no no no no no no no no no no no no no no no, you get the idea.Also, the same applies to brothers and mothers - almost forgot.



I totally disagree with your sweeping comment about lending money to brothers and mothers. I've lent (and been lent) money to my mother, brother and sister and it has always been repaid back. Though I can understand that not all brothers and mothers can be trusted with loaned money, you shouldn't tar them all brothers and mothers with the same brush. My family in particular are very good at handling money though I can appreciate that not all are!

mom dad brother or sister i would IF i know im getting it back
cousins, friends, in laws dog cat whoever else i will just decline
i mean why bother? its not like u get anything out of it and will probably just cause more hassle
my advice NOOOOOOOOOOOO dont do it

Well I'll tell you right now my mother is a total ____ (I'll let you think of something). She never, ever settles a debt / loan and just shrugs it off. Then of course if you follow it up out comes the "I brought you into this world" card, if I had a pound for every time I've heard that...........

I'm more relaxed when it comes to my siblings though as they're not as well off.

Me, annoyed? Never...

Original Poster

abomination;6289548

Well I'll tell you right now my mother is a total ____ (I'll let you … Well I'll tell you right now my mother is a total ____ (I'll let you think of something). She never, ever settles a debt / loan and just shrugs it off. Then of course if you follow it up out comes the "I brought you into this world" card, if I had a pound for every time I've heard that...........I'm more relaxed when it comes to my siblings though as they're not as well off.Me, annoyed? Never...



That's fair enough (I wouldn't loan to my mum if she was like that either) but that doesn't mean all mothers are the same.

Same could be said about friends, just depends on how much of a friend they really are.

Depends how good a friend they were. I have one friend I lend money too and vive versa. We trust each other implicitly but I know that's rare

Original Poster

nikkib123;6289628

If youd did lend him the money and he bought the car, he would then need … If youd did lend him the money and he bought the car, he would then need to get insurance, tax and petrol. Who says you will be at the top of his list when it comes to monthly outgoings?



Yeah I know I told him at the time that the standing order would have to come out the day after he gets paid but I've already decided not to lend the money (even if it does mean having to give him a lift to work!)
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