Friends Want to Borrow Money

Rapt0r30 on 28/07/2020 - 15:49
Last edited 28/07/2020 - 16:18

Some friends have recently lost a car and need to replace it urgently but don't have the funds to do it themselves.
I have always been open with my finances and encouraging others to save instead of taking out a loans for things but their current situation means they will either have to try and borrow from a bank at a high interest rate or I can offer them something better

I've known them both for a while now and trust them with money although I just wanted to know what OzBarganers thought of the situation?

Financial

Comments

  • Raj09 on 29/07/2020 - 01:10
    +1

    You are not a bank. And that purchase is not essential that you have to shell out money for friends.

    • berry580 on 29/07/2020 - 08:05

      What if they're stuck overseas, they lost their wallet and their only means of communication is via Facebook and they need your $500 be sent via Western Union to save them? =D

      • ozbaragan on 29/07/2020 - 15:27

        Sounds like my famous Nigerian prince 😂

        • Raj09 on 30/07/2020 - 08:44

          Hahaha 😂

  • ass3ts on 29/07/2020 - 03:53

    Find better friends

  • Trioboy on 29/07/2020 - 05:40
    +3

    I once lost a "friend" for $600.

    • AustriaBargain on 29/07/2020 - 07:36

      I'd pay someone $600 to not have to hassle them hundreds of times for it back like a debt collector. Eventually the return per hour of debt collecting dips below minimum wage, when it was your money in the first place.

      • Trioboy on 29/07/2020 - 08:27
        +1

        I only asked for it once or twice, they eventually stopped talking to me.

        • AustriaBargain on 29/07/2020 - 08:30
          +3

          Damn man, your friendship isn't even worth a measly 600 bucks to them. They sound like jerks.

          • Trioboy on 29/07/2020 - 08:52
            +2

            @AustriaBargain: $600 doesn't sound like much. But I was only a uni student at the time and was working part-time. Luckily it didn't affect me financially, I think…. maybe I could have put it towards my FHB deposit…..
            This guy didn't have money to pay for his accommodation. So, I helped him pay for it. He was struggling financially for a while, falling behind other payments, etc. So I didn't really ask for it. I only asked for it when I noticed he been buying discretionary items like expensive mobile phones etc. He eventually stopped talking and moved to Melbourne lol.

  • CoreJava on 29/07/2020 - 06:10
    -1

    good friend, lend him money, not so good friend, ask him to p off

  • IMadeYouReadThis on 29/07/2020 - 07:18
    +7

    Just prepare yourself to lose the money and the friends too… I lost trust in a relative after lending them $20k which they were suppose to return in few months but here we are after 2 years, only half of the money has come through and in the meantime their overseas trips continued.

    • Zachary on 29/07/2020 - 12:57

      tElL ThEm yOu wAnT ThEiR mOnEy BaCk oR ElSe!

    • brad1-8tsi on 31/07/2020 - 09:10

      I know of several cases like this. The attitude seems to be "They've got plenty of money and don't need it. I'll take my time. If they aren't asking for payment it's probably a gift."

  • crosswire on 29/07/2020 - 07:33
    +2

    Just in case there aren't enough NO's already. NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO.

    Don't do it. The chances of it ending badly are extremely high.

  • AustriaBargain on 29/07/2020 - 07:35
    +2

    They can catch Ubers until they figure out how to replace their car. Don't get roped into driving them to work just so they can save a few bucks on other transport methods.

  • voiletmay on 29/07/2020 - 07:50

    No, let them find their own solution. If you really want to help give it to them. Don't lend ever.

  • berry580 on 29/07/2020 - 08:01
    +1

    The interest rate has been lower than its ever been in decades.
    Do your friendship a favour and kindly direct them to a bank.

  • ldt on 29/07/2020 - 08:35
    +5

    Don't do it!
    I've loaned money to people twice in the past.
    About 10 years ago I loaned a work colleague around $1000 for spending money on her holiday. She came back, quit her job and I never saw her again.
    About 5 years ago I loaned my friend $500 when his credit cards and bank cards were stolen and it was the weekend so he couldn't just go to a bank. Never got it back and now don't talk to him.

    I will never do it again!

    • PerfectShopper on 29/07/2020 - 12:37

      Sometimes we are too kind. I always look at it as a cheaper lesson then lending them twice the amount!

      Also, despite us both having learnt to keep our cash to ourselves - beware getting burnt by delivering goods without payment first.

      I just got rorted for $24 plus all the fuel and effort, because she was not home - so I left goods there. I'm still fuming over my idiot act.

      She never paid and now ignores me.

      • Zachary on 29/07/2020 - 12:58

        why didnt you wait at her house until she came back?

        • ldt on 29/07/2020 - 18:22

          I didn’t know where she lived.

    • Zachary on 29/07/2020 - 12:58

      Fool me once, shame on you, fool me twice, shame on me.

  • greatlamp on 29/07/2020 - 08:35
    +4

    If you were in their situation what would you do?

    Probably get a very small loan from the bank so you can pay it back quick, and buy a $3k car to get you by

    What are they going to do?
    The bank won't lend them money… why?
    They have other debts already that need to be paid first

    Once they know your money has no interest and no time limit, suddenly they are buying a 15k car.
    They can't afford to pay you back, they rationalize that you are a 'rich (profanity)' for wanting your money back and friendship over.

    Say no. Find a reason you can't lend them the money.

  • dirtybigbjelke on 29/07/2020 - 09:05

    You should just hand the money over as a gift and never expect to see it again. As hundreds of others have said a loan will go sour. Never get involved financially with friends or relatives

  • luffyex2010 on 29/07/2020 - 09:09

    Unless you want them to label you as the "free ATM Bro".

  • sw00p on 29/07/2020 - 09:20
    +3

    I'll invite you to re-frame this situation, not as a problem that YOU have to solve, but as a valuable learning experience for them. They need to learn, first, to save their money in the future in order to avoid situations like this and second, how to actually get themselves out of situations like this when they occur, as they inevitably will throughout life.

    You swooping in and 'White Knight'-ing their situation robs them of the opportunity to learn both of these things.

    I am a lot like you and am very good with money, but it's 'all tied up in investments' in order to avoid ever being in the situation you currently find yourself in.

    • Hangryuman on 29/07/2020 - 09:47

      yeah - look at it from their perspective - you 'obviously didn't need it' - so they 'obviously don't really need to pay it back'

      and if you insist, and start demanding, that's just rude and nasty, and they'll have to go elsewhere, and disappear far away … never to be seen again … just human nature …

      • Yola on 07/08/2020 - 17:44

        and bad mouth you to all your mutual friends.

  • Hangryuman on 29/07/2020 - 09:43

    what's the saying 'don't lend money to friends or you will lose both' ?

    do not give money that you expect back

    unless you have a lawyer prepare and explain the contract to them, and they agree and sign it, not recommended

    the friend relationship will change and probably be destroyed as soon as money obligation enters

    so you're playing with fire mixing business with friendship - they are largely incompatible

    that said - an ex-girlfriend once gave money to some random guy that needed it - and he paid it back - that might have been a pure trust gift that so overwhelmed the guy that he felt he must repay it - she was also pretty hot looking so …

    but if you expect to earn interest AND get repaid - expect to get screwed over - see Ponzi scheme, etc.

    • Zachary on 29/07/2020 - 13:03

      do u have pics of ur ex? i need them for a …um, social experiment….yes…social experiement…

  • itstuan on 29/07/2020 - 10:07
    +1

    Having said lending friends money you will lose both the cash & friendship. However it’s not entirely true. It depends on the person you are lending to. Are they trustworthy? Some you think are good friends but you guys really never run into any situation to test your friendship.
    When I bought my house, a friend I used to work with lend me over $60K for the down payment (with interest of course). I’m still paying her off.

  • ozbjunkie on 29/07/2020 - 10:10
    +3

    Lots of people recommending just not to do it. And there's good reasons.

    But I'll recommend this. Lending someone an amount of money you're prepared to never see again can be an incredible test, and proof, of a friendship.

    As I get older, I'd rather fewer friends, over a large number of people I can't count on and who don't respect me.

    "You can't lose a friend, but you can discover that you never had one".

    So, if you want to do something nice, and can easily spare $2k, lend them the money. You won't lose a friend, but you might work out you never had one. On the plus side, they might appreciate it, and show they respect you by paying it back.

    • syousef on 29/07/2020 - 10:50
      +2

      That's a lot of money to pay just to test a friendship.

      You could give me $1000 and I'll prove I'm not your friend. No? How about $500? Ok. Ok. $10 final offer! ;-)

      • ozbjunkie on 29/07/2020 - 12:44
        +2

        A friend would never ask. You're not my real friend sadface.

        Seriously though, I have been burned, and also been pleasantly surprised.

        It depends on the friendship, I'm just saying, if the idea of helping a friend AND possibly losing that money is worth more than the money itself (I don't know how much money OP has, but 2k could be relatively unimportant) then it is not always a bad decision to lend a friend money.

        A good friend. A "keys to my house, mind my dog while on holidays, please take my kids for the weekend" friend.

        Not a "want to go dutch in a 6-pack after work" friend.

        But yeah sure I'll lend you $10 bucks, there will be a small amount of paperwork.

        • syousef on 29/07/2020 - 13:34

          While I don't agree with you on this one, you sound like a decent bloke. I'd be happy to be your acquaintance at the very least.

  • wannagrababargain on 29/07/2020 - 10:21

    Could you just lend your friend your car instead?

  • DemocracyManifest on 29/07/2020 - 10:29

    Car loans are better interest on average than personal loans because they are secured debts, so the interest rate is lower. They can also access their super if they have experienced a drop in income - don’t lend them the cash

  • A Driver on 29/07/2020 - 10:33
    +1

    Have they found it yet? They should check under the cushions of their couch…

    • holdenmg on 29/07/2020 - 12:27
      +1

      I found the Remote Control and an unused Face Mask sealed.

      Good times.

  • Allwentmarching on 29/07/2020 - 12:03
    +2

    I wouldnt, personaly. Heard too many stories of this going wrong. Its nice that you care but you need to look out for yourself in the current situation.

  • ofey on 29/07/2020 - 12:03
    +1

    If they're you're friends, value the friendship. Do NOT lend money.
    You can buy them meals, you can buy them groceries.
    But NEVER lend money.

  • Zondor on 29/07/2020 - 12:17

    Never lend an amount of money that you would care about if you don't get it back.

  • PerfectShopper on 29/07/2020 - 12:22
    +3

    Oh wow, I had exactly the same situation. I dodged the bullet thankfully. I suggest you do the same. My story is some people who wouldn't help me with a simple task, yet did not hesitate to hit me up for thousands to buy themselves a car. Mind you, they have defaulted on every other loan they've almost ever had. You could compromise - buy a car and agree to rent it out to the for a weekly fee. Cover your insurance, but maintain ownership. See how they go paying this for 3 months. If they do well, then you could do a rent to own deal thereafter! I couldn't be bothered with my friends as I knew they wouldn't even pay that rental. So glad I didn't create a headache for myself.

  • PerfectShopper on 29/07/2020 - 12:30
    +1

    I want to add that it can be hard to judge who will repay you. I've had so-called quite well known well-off friends never repay me…but I was delighted when I lent $20 to a near-stranger Aboriginal lady in a refuge….a week later, she paid me back. People are not always what they seem. The lady from the refuge was the last person I ever lent money to as I ended my terrible record of loans on a good note. I'll never forget her for that. $20 was a lot of money to her! I had so much respect for her for doing that.

  • sarahlump on 29/07/2020 - 12:31

    Money is evil, loans are considered evil to Christians for a reason(usury) maybe you should just be charitable and get them an ol shitbox car and they can fix the problem when they can.

  • john_conner on 29/07/2020 - 12:40
    +1

    Where did OP go?

    Try other ways to solve the problem…
    Do they really need to own a car? Plenty of ride share options, public transport, car rental options that you could use rather than going for car ownership.

    Also why wasn’t the car insured? If 3rd party a fund should be set up to self insure.

    Sometimes you gotta let people learn things the hard way.

  • pogichinoy on 29/07/2020 - 12:47

    Let them go down the bank route.

  • PerfectShopper on 29/07/2020 - 12:50
    +1

    Would they do the same for you is the question?

    I've recently stopped being a free ATM and free airtasker and freewhatever for freeloaders!

    I withdrew my $10K super during Covid and enjoyed every dollar myself.

    It felt strange not to be spending my money on others and their dilemmas!

    Get used to it - everyone should. I figure I don't get many favours from people, so time to stop being a doormat.

    • jelko on 29/07/2020 - 17:14
      +1

      If you hadn't been an ATM for your mates then maybe you wouldn't have had to withdraw the 10K from your super. You got screwed twice.

  • Zachary on 29/07/2020 - 13:10
    +1

    I lent a couple friends some money expecting to get it back. One guy took a few years to finally get it done and the other never came back to me until I found out he spent it all at the casino and never won anything back and continued to borrow more money from other people to get his gambling addition on…

    Morale: Expect to not get paid back or at least not in a reasonable immediate timeframe if it does come back, not DO expect to get it back if that's your intention of lending. Or treat it as a way to gauge your friendship level like others have said and expect this to be your expense.

  • mrwolf on 29/07/2020 - 13:11
    +2

    I am in the same situation. A friend who lives OS needs money and I have lent him money in the past and he did not pay me back. I could afford the amount so just let it go. Now he has been hinting for a few weeks that he has bills coming up and he will need $7000.

    Last night I received a message from him that he needs a huge favour from me and can I phone him please. I have ignored that request as I know it will be "can you lend me the the $7000". He knew these bills were coming up but I guess he just can not budget. He gets drunk everyday, and my thinking is slow down the drinking and budget for theses bills as we all have to do.

    I have told him it is time to come back to Australia as he is not managing OS, and that I will help him settle here, but he will not listen.

    I am just going to ignore any favours that require money, if it kills the friendship so be it.

    • greatlamp on 29/07/2020 - 17:37
      +1

      If they are $7 K in debt, they should have some asset attached to that. Sounds like they want you to fund a mortgage they can't afford

    • Yola on 07/08/2020 - 17:50

      I think you are right. You are not responsible for your friend..

  • Fysh on 29/07/2020 - 13:14

    Make sure the car is in your name until they pay it off.

    Make sure they insure the vehicle at all times.

    Lend the money saying you dont have the money but can easily borrow that amount from a friend.

    if they ever dont pay say your friend needs the money.

    If they ever dont pay for more than 90 days you can ask for your car back.

    Add $500 onto the loan and also make sure that you specify that any tax returns should go straight to the loan.

    • Yola on 07/08/2020 - 17:54

      I think it would not be possible for OP to be sure that the car is insured. The friend is irresponsible with money and may not pay the bill. Then OP is then responsible for any damage the car causes. As his friend has already "lost" one car he may easily loose another.

  • Maxxjet on 29/07/2020 - 13:36

    Not sure if anyone mentioned this already, a way to do it really is, if they asked for $x, if you are very good friend, you do offer 50% of the $X as a gift meaning you tell them no need to repay it back unless your friend absolutely insist. 50% could be reducd or increase to whatever you are financially comfortable.

  • DingoBilly on 29/07/2020 - 14:11
    +1

    Eh only you know your friends.

    People here are pretty openly against it, but I've borrowed $25,000 from different friends and repaid it all with higher interest rates than banks. I'm probably a low risk, but there's a few friends I have that I would trust with $50,000 easily.

    Only you know what your friends are like though. Everyone is a bit too quick to throw out the easy advice when in the same situation I doubt they'd act the same.

  • apple2016 on 29/07/2020 - 14:25

    Don’t lend money to your friends. But you can give it to them as gift.
    If they are good friends there might be a small chance they might gift it back to you. Good luck!…

    • Yola on 07/08/2020 - 17:55

      Even then they may resent receiving charity and the friendship will eventually be no more.

  • ireadtermsofuse on 29/07/2020 - 14:28

    ”It was a gift”

  • cyrax83 on 29/07/2020 - 14:41
    +1

    Lent a work colleague and friend at the time $900 because she was struggling. Promised she'd pay it back. She changed jobs stopped replying to my messages and gone AWOL.
    Write off, never again.

  • squaredonut on 29/07/2020 - 14:50
    +2

    Never lend money, period. Unless it's your Mum, Dad, Brother or Sister. Even then you should be lending money for dire situations, like keeping a roof over their head or providing them with money for food or for medical bills.

    Things never end well with lending money to friends, and also if they aren't hounded with statements and reminders to pay minimum repayments they will not learn to be disciplined with any money coming in. Either "ahhh we got a $100 spare this month, but hey owe Rapt0r30 some money, ooo but I have my eye on xyz, Rapt0r30 would be alright with us paying him next month", as opposed to "damn we have to pay $90 back this month to the bank, it's due end of the month, gotta pay it or they'll call the debt collectors".

  • FareEvader on 29/07/2020 - 15:19

    What's your risk appetite?
    How much are you willing to lend and when will you need it back?
    Do they have the ability to pay it back given the current economic climate?

    May I suggest getting a loan from RateSetter. Their interest rates are generally lower than banks.

  • Duram on 29/07/2020 - 15:32
    +3

    You trust someone with money who doesn't have any funds to buy his own car?

    • Yola on 07/08/2020 - 17:57

      Totally agree. If the friend cannot save how will he save enough to pay OP back.

  • Aerith-Waifu on 29/07/2020 - 16:00

    Hard one, in China, its very normal for your friends to borrow money from you if they need it urgently and many will let the money to them. Not sure how Australia works though………..

    Is it the same conception?

    • jelko on 29/07/2020 - 17:16

      No.

      • Aerith-Waifu on 29/07/2020 - 17:28

        Good. Better be this way

    • Ghost47 on 29/07/2020 - 19:26
      +1

      Is it the same conception?

      I believe conception in China and Australia are similar.

      • berry580 on 30/07/2020 - 07:48

        Culture a bit different. Kind of like how in China, red pocket = $100 cold hard cash.

        In Australia, red pocket = $1.00 in cold hard lollies

        • JelIyfish on 30/07/2020 - 14:15
          +2

          He means sex

  • sy8718 on 29/07/2020 - 16:48

    Maybe it does not happen, but just be prepared of losing friendship and the money if you say yes.

  • Usemame on 29/07/2020 - 17:31
    +1

    I feel posting here kinda hints that you are not 100% trusting them with money. Also trust doesn't guarantee the repayment.

    Plus think twice about why you're open with your finances. This might be why you could be considered as an option for borrowing money now or in future.

  • infinite on 29/07/2020 - 17:56

    Don't loan the money to them. It's one of the fastest ways possible to end a friendship.

  • Orico on 29/07/2020 - 18:08
    +2

    Say no. If they ask again, tell them your parents said no!

  • The Value on 29/07/2020 - 18:19
    +1

    There are 3 things you never lend out.

    • Money
    • Car
    • Wife/Husband
    • Aerith-Waifu on 29/07/2020 - 19:46

      Number 3: Asking the swingers……………lol

    • Zachary on 30/07/2020 - 16:20

      Wait, i didnt know people lend their Wife/Husband? What for? For a good time?

  • sgtdanny69148 on 29/07/2020 - 19:32
    +1

    Don't do it, no matter how much of a bumchums you are with them, don't. Because there will be a time of silence when they act like they forgot about it and asking them "can i have my money back" or "can i borrow back some money" would make you an (profanity) or a loanshark and if it gets really really bad, they might even say "I don't know what your talking about", that's the worst one. I can tell you from experience that's has happened to me they needed some money for a car so being a good bloke i am i lent him some, its been 7 years and seeing that his facebook is full of partying weekends and he drives a fully decked rexy, i decided to ask him since i was also cleaning my financials, no need for interest or inflation adjustment, he dropped the "I don't know what your talking about" line, so now its kiss goodbye to that hard earned money, never again…

  • nikey2k27 on 29/07/2020 - 20:03

    if you happy loss that money go loan i know i am same i loan money over year been total burned but i have one time rule now limited to $50 loss is worth it

  • pikapika on 29/07/2020 - 20:15
    +1

    If you value the friendship then say no to lending the money. It just gets messy. If you want to lend the money then kiss it goodbye and possibly the friendship as well.

  • Jackamo on 29/07/2020 - 20:20
    +1

    Before you say anything, No I will not offend you by offering to loan you money. After all, you would feel forever indebted and I would never do that to you, my good friend.

  • Curiouscat on 29/07/2020 - 21:22

    Comment from someone who was trusted by a mate and loaned to.

    One of the very good family friend lent us $89k to invest in a lottery and general store business purchase, which was 25% of total business cost . We presented the business case to mate and explained how we plan to pay back.

    My family couldn't help , my spiuses family could neither however , our family friend helped us and we paid off in 1 year.

    Here your situation is a lil different, just my 2 cents

    • moo on 29/07/2020 - 21:54
      +2

      This is key “ We presented the business case to mate and explained how we plan to pay back”.

  • tabitha731 on 29/07/2020 - 21:55
    +1

    Friends and money do not mix! No matter how long you have known them, all my friends would never ask to borrow Money from each other.. you should have savings as a responsible adult, or find a way to get money legally.. or learn to live without a few things.. learn to be resilient

  • Philthy on 29/07/2020 - 22:29

    have you loaned them money before?
    whata re they like with other situations with paying things ?

    eg : if smeone doesnt pay their share of food bill (the repeted classics of o i forgot my waller..oh im short).. then hell no will they get a loan.

  • berger on 29/07/2020 - 22:40
    +2

    No more feedback from OP? 3 Pages of comments!

  • aerona on 29/07/2020 - 23:05
    +1

    Why has no one suggested to buy them a crap box. Surely a $1—$2000 car would suffice.

    • Zachary on 30/07/2020 - 16:20

      Where can you get a $1 car?

  • Typical16-bitEnjoyer on 29/07/2020 - 23:22

    Offer to loan you car for 2-3 weeks.

  • AMLagonda on 30/07/2020 - 01:08

    Lend a friend money and they will no longer be friends, you never "lend" money unless you are a bank

  • [Deactivated] on 30/07/2020 - 09:54

    If you want to lend your friend money then that's up to you. Personally I agree with the consensus but no-one has more context than you do.

    However, the suggestion that you will be charging your friend interest for a loan appears to be extremely mean-spirited.

  • locknuts on 30/07/2020 - 11:10

    Call it a loan but treat it as a gift. If they pay it back, then great! Expecting repayment could end the friendship if it goes pear-shaped though.

  • [Deactivated] on 30/07/2020 - 11:38
    +2

    If there was actually a poll, I dare say the majority would vote no.

    My answer is no.

  • GourmetFoodie on 30/07/2020 - 11:38
    +1

    Depends on the closeness of the relationship/trust levels, what I know of their money habits and if I could spare the money.
    There are definitely a few close friends and family I'd lend money to in a heartbeat. But I know they would work until their dying breath to pay it back and have the actual capacity to get jobs/earn the money to pay back etc!

  • [Deactivated] on 30/07/2020 - 11:45
    +1

    Don't do it. I don't want to reveal details in case my anecdote becomes identifiable, but let's just say that I knew a guy, out of kindness, who lent money to his "friend" and it turned out to be dangerous for the lender. It's up to you to weigh up the dollar amount you're willing to lose and the value of your friendship.

    With that said, if you must loan, put it on paper. If your friend has no avenues to seek financing from a legitimate source like a bank and needs to turn to "personal" loans, maybe seek the help of a lawyer who can help you write up a loan contract or loan agreement to identify the parties involved (i.e. you and your friend). You can still offer them a great loan "deal" in the contract terms. A small fee for peace of mind.

    Unless you trust your friend 100% and trust that they are reliable, trustworthy, and capable of paying you back, seek to protect yourself as well… Honestly, it sounds like your friend is not very good with managing their finances. So… it's up to you.

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