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

  • hasher22 on 30/07/2020 - 11:54
    +2

    OP has an update for us?

    I am late to the party but as majority state, the answer is NO. My answer is NO.

    If they don't have backup funds for emergencies, then what makes anyone think they will pay you back in good time?

    PLEASE DON'T DO IT!

  • McBanjo on 30/07/2020 - 11:55

    Never loan friends money unless you would be willing to gift it. So much easier to say no because you have personal rules about lending money than to say, "oi, where's my money?" for several years after.

  • Jackson on 30/07/2020 - 11:58

    This guy is clearly taking the piss, 3 pages of comments and not one response from him

    • funeste on 30/07/2020 - 16:27
      +1

      OP is 20 years old, expect 3-5 days to get a text back.

  • cvamoose on 30/07/2020 - 13:28

    Are they looking to buy an $80k car? Sounds like a high yield investment to me

  • Bargain Chaser on 30/07/2020 - 14:09
    +1

    I have loaned money to a Sibling all my life and rarely got paid back, But the one time i asked them for help i didnt hear from them for months and they have never brought it up since…..just saying not good idea!!!

  • life is suffering on 30/07/2020 - 15:09

    "Friends and money - oil and water" - Michale Corleone

    • zathras on 31/07/2020 - 13:44
      +1

      “Neither a borrower nor a lender be,
      For loan oft loses both itself and friend,
      And borrowing dulls the edge of husbandry.” - Polonius

  • devank on 30/07/2020 - 16:13
    -1

    I feel and do different to many people here.
    Few points:
    1. What's the point in being a friend if you can't help in need?
    2. I would rather waste some money than having a bad friend.
    3. You learn a lot more about a friend and become more closer when you help them out.

    • hasher22 on 30/07/2020 - 23:08
      +1

      There's a mental difference with people and money.

      Help a friend to move? Sure
      Help a friend to a hospital? Sure
      Help a friend cause they broke down on a high way? Sure

      But giving money is a different ball park all together. Money makes people 'different'.

      If u want to help a friend, do it with non-monentary things

  • Zachary on 30/07/2020 - 16:22
    +1

    I'm starting to think this post was a social experiment since OP hasn't replied to any of these comments or updated his situation on it….

  • Greem85 on 30/07/2020 - 16:47
    +1

    Money and friendship is like water and oil.
    THEY.
    DONT.
    MIX.

    Plus, if you pour water into hot oil, you get the burns.

    Honestly, lending any sum to even closest friends is a recipe for a loss of friendship. I have been there and experienced it first hand. Learn from my mistakes.

  • zombrex on 30/07/2020 - 16:48
    +2

    No more than $100 and only in a situation when you are together and their bank card suddenly does not work. In almost any other scenario you should not be lending money.

  • kouk on 30/07/2020 - 18:21

    Here's an idea if you're worried. Consider it a gift, and a bonus if you get it back. You get to help a friend, and you might grow in character.

    • [Deactivated] on 30/07/2020 - 19:35
      +1

      There's a difference between "being helpful" and "being stupid".

    • Yola on 07/08/2020 - 18:13

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

  • Yotta00 on 30/07/2020 - 18:41

    He has to borrow at a high interest. 3k @ 20% is not a hard to pay off.

  • baskinghobo on 30/07/2020 - 20:08
    +3

    A friend once asked to borrow $500 from me to pay off a large phone bill. Initially I was a bit hesitant but he seemed quite desperate and I am a nice guy plus he had never done me wrong so I asked for the said phone bill. He did actually have a phone bill for $500 so I gave him the money then he cut contact with me right after that and even threatened me when I asked about my money. Learned my lesson after that..

    Tl;dr: Everyone can get a loan. Let them sort out their own life problems just like everyone else. If they can't get a loan it's probably for a good reason.

  • HKS on 30/07/2020 - 22:33
    +2

    no way. you will always be thinking about the money they owe you and ruin the relationship.

  • MrMarket on 31/07/2020 - 08:41

    Have a rule about money, stick to it and explain it to them.
    I have a rule I dont lend money to friend or family, if they come and ask, I said just said no

    I said I dont borrow money from family and friends and in return I wont lend them either due to high risk of things fall apart and I dont have a family and friend and money
    having said that, tell me your predicament and see if I can help in some way, If they need a few K and I got some spare money, I tell you what I can give you $500 or $1000 but
    that your to keep you can source the rest else where.

  • brad1-8tsi on 31/07/2020 - 09:05
    +1

    All the friends I would trust to pay back a loan don't need to borrow money of me.

    edit: Are you saying they had no insurance or were they insured but the payout doesn't cover replacement?

  • Mosher on 31/07/2020 - 09:35
    +1

    watch judge judy and the amount of cases where someone lends a friend or relative money and then they have to see judge judy as their friend/relative says it was a gift not a loan

  • dny on 31/07/2020 - 09:48
    +1

    I've lent a friend 10k before, they paid me interest but saved on bank fees and a higher interest rate from the bank. He repaid it with zero issues and everybody was happy.

    If you have a strong mutual trust and lay out the terms before hand rather than casually deciding to part with your money in a whim then sure, it can work.

    Would I do it again? Now that I have a few more financial commitments and investment options, probably not.

  • mini2 on 31/07/2020 - 10:07

    "I value our friendship…" you know the rest.

  • w37hsyea on 31/07/2020 - 11:07

    Don't do it. You just say - no, not in this situation, I need the money as things are getting worse.

    Straightforward. Let them get a loan.

  • iamnobody on 31/07/2020 - 11:46

    If I don't have money I don't buy it.
    If it's really urgent there are businesses that can help.
    I "gave" money and stuffs to family and friends without expectations of getting them back even though they said they would return them.
    If you can spare the money in the end it's your money and your friends, up to you what you do with those I guess that in the end what counts is what you do with the experience.

  • Jumpup on 31/07/2020 - 14:29
    +2

    Twice what I called good long term friends borrowed money from me.
    I always spoke about how I save up and they figured what I had and how much it was worth.

    They both never paid me back. They made excuses until it was years after and forgotten.
    I know they were thinking they needed the money more than I did.

    This was around 2k.

    • chisinpor on 02/08/2020 - 05:14

      Did you let mutual friends know about it? Maybe the shame will force them to want to repay you. I hate it when people feel entitled to a share of your savings just because they think you can afford it, that's just not how it works. I don't think they deserve to have you let them go just like that, but if the mental anguish of it all is worth more than 2k, then I can see why you decided not to pursue it. When I confronted a friend about abusing my help, she said 'but I thought you had savings and don't need to pay rent', I was in disbelief at her response, just because I am not struggling financially, doesn't mean that she is free to take my money. Makes me so mad thinking of it.

      • Yola on 07/08/2020 - 18:16

        I think this is very common.

  • AyjeofSpades on 31/07/2020 - 16:54
    +4

    Nope, bad idea.

    At one point or another they will fail to pay, then everytime you see or hear of them enjoying a luxury you'll resent them for it.

    'Oh look, John couldn't pay his debt this week but he could somehow afford a winery tour with Kate.'

    'Oh look, Kate got a new haircut. What was that, like $60?'

    'Oh, you're ordering the sparkling water? Shouldn't you just have table water instead?'

    • chisinpor on 02/08/2020 - 05:07

      this is true! I hated being resentful and thinking like that. Just because they borrowed money from me, doesn't mean that they can't enjoy living, yet I couldn't help but feel resentful.

  • Insision on 31/07/2020 - 20:15
    -1

    Apostle Paul
    The love of money is the root of all evil. All wrongdoing can be traced to an excessive attachment to material wealth. This saying comes from the writings of the Apostle Paul. It is sometimes shortened to “Money is the root of all evil.”

  • Royalmarker59 on 31/07/2020 - 23:23

    Depends on if you want really help friends lending money. But be prepared not to ask or don’t expect your friend will return money . Or don’t even ask or be patient until he returns

    Everyone’s situation changes with time. Bad to good or good to worse as well

    Better be prepared

    No one in this world is bad , I feel
    Everyone is good but people
    Act or behave according to the situation or time and their thoughts

    It’s like ant and elephant

    An Small ant walking in wrong direction on a huge flatform like an elephant

  • bah humbug on 01/08/2020 - 10:35

    Don"t mix business & pleasure.

  • Eeples on 01/08/2020 - 12:28

    They still have at least one car.

    They will manage.

    PS. Most likely they have dropped subtle hints that you could lend them the money. Don't fall for that.

  • tikei on 01/08/2020 - 13:58

    Yes I would lend. Only because my friends have been carefully vetted and I trust their moral character. So the number of friends I have is only 2 lol. The rest are acquaintances who I would not lend.

  • ozaym on 01/08/2020 - 18:52

    What does “lost a car” mean? That sounds dodgy.

  • chisinpor on 02/08/2020 - 05:00
    +1

    It's a tricky situation. If you loan out money, it's best to put the agreement in writing (maybe with a planned repayment proposal), I'm not sure about how enforceable it is legally, but at least there is a signed agreement you could refer to in the event of a dispute. Also good to have an electronic record of payments (both the loan and repayment) made. Be prepared to lose both your money + friend as the worst case scenario, if you are ok with that idea, then loan away.

    I once loaned a lot of money to a friend, I thought they would repay me within a month or two max, but they didn't. They never brought up the topic of repayment and I didn't want to made things awkward by reminding them of it, but at the 6 month mark, I got quite anxious and made up an excuse saying that I had to buy a car and needed money, that's when they transferred some of it back to me, they still didn't let me know when they planned on paying the rest of it back. Long story short, it took about a year and half of me sending hints and reminders for them to pay me back in full, but during this time, I grew resentful that I had to be the one chasing them for payment in dribs and drabs + the fact that they had money to go on holiday but not pay me back. I would have been happy with some regular updates from them as a form of assurance. I should have been assertive and clear from the start but I didn't want them to feel bad about it.

  • Team Ozgiftcards on 02/08/2020 - 14:49

    How much are we talking about? And also, is that amount big to you?

    Paying a small sum to know someone's true character could be one of the cheapest and wisest investment you can do.

    Also helps to have clear terms of the loan in writing so theres no misunderstanding.. say your accountant suggested you to do this.

  • wizoo on 03/08/2020 - 10:09

    What happen if your GF wants to borrow money, being tgt ~9mths, wondering if makes any difference?

  • baldur on 04/08/2020 - 14:04

    comes down to how close you are. My approach is don't lend money anyone except parents and siblings and maybe so so close friends. Other than that, if you still want to lend money, Give an amount that you wont even bother asking for the repayment even if it is long overdue. like a few hundred dollars at most?

    • Yola on 07/08/2020 - 18:19

      You may be surprised that even siblings can take your money and never pay back.

  • iand on 06/08/2020 - 22:03

    Never lend more than you a prepared to lose
    You should be able to get a car loan for less than 10% hardly high interest rate if they can't afford to get and repay this they can't and won't be able to repay you

  • ziaxk87 on 07/08/2020 - 06:03

    assist them to get the best deal through bank . you can have asset finance or low doc finance which basically means loan at 4% which is far better than normal car loan

  • Ash-Say on 07/08/2020 - 12:15

    Depends on how much each party values the friendship. My parents helped me with deposit(was short $50k) but it took them at least 4 weeks to send money from overseas as they had to sell some assets first.

    I asked few friends to help me out with temporary loan. Some of them gave more than requested amount, couple of them asked for a written agreement(I happily signed) and couple of them refused to lend anything. At the end of day, I got the required amount and paid back at least 1 week before the agreed date. All parties were happy and it was a good outcome.

    The friends who lent me required help down the line and I happily loaned them without any agreement and they also returned the funds before the agreed date. I might be lucky but it also tells you who is willing to help you in need.

    I will say " A friend in need is a friend indeed".

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