There are some traps that people walk right into in life with the best of intentions, only to be left wondering what happened in the end. We can make great choices thinking that we are doing the right thing, only to realize that there are some things that you should avoid doing. Some question whether it is a good idea to loan money to friends and even family members. This is a tough call because you want to help someone out, but more often than not, this can lead to strained family relationships and even the loss of friendships that were once very important in your life. Some say that you should never loan money to friends. Saying never is a bit harsh, but it really is a good idea to stop dead in your tracks and really think through what you are about to do if you want to help out a friend in this manner. You really have to think about everything involved when you want to loan money to a friend. The first thing you should think about is why they need the money. Is it something they must have cash for, like an emergency, or is it something else? If it is not important, perhaps you should say no. They may be a bit hurt, but you may have just saved your friendship in the long run. You also have to think about how much money they need when you decide if you want to loan money to a friend or not. Is this money that you could part with easily, or do you have it put away for something specific, like moving expenses down the road or even for your wedding that is to take place next year? If you could just part with the money, as if it were a gift, without too much harm, the loan may not harm you financially if unpaid. If you have that money marked for something important, do not part with it if you can not easily replace it no matter what promises are made. Also think about the friends/family members in question when asked to loan money to them. Do you think they are responsible? Do you think they will make paying you back a priority? Do you think they make enough to comfortably pay you back without delay? These are good questions. If the answers are all yes, the idea to loan money may be a good one, but only if it is for a necessity. It can be harder to say no to family members that need help, but you really have to know the score before you part with your money. You have to protect yourself first. If you do loan money to a friend or family member that is over a hundred dollars, you have to get a repayment schedule put down in writing, and have it witnessed if at all possible. Though you do not want to have to take them to court, it could end up that this is what you need to do. Without paperwork or a paper trail when you loan money, it is your word against theirs. They could simply say that they have no idea what you are talking about, and you could be out all that money. Not only that, the friendship will be over. Really think hard before you start loaning money out, as it can end very badly for you if you are not careful.
I usually say, if the person is a close friend and he really needs it, give him the money. Don't expect to ever see it again. If he pays it back, consider it a bonus. If you can't afford to lose the money, don't give OR loan it to him. Tell him you don't have it. Plain and simple.
I was always taught not to lend money to friends. *Give* them money in a time of need if you really feel like it's their only option, but don't see it as a loan and only give an amount you can afford to never see again yourself. That way, if they pay you back later, then awesome, but otherwise, it's seen as a gift you wanted to give and there's no bitterness attached.
Looking at the words of Polonius in Hamlet, the best answer to this situation is, 'Neither a borrower nor a lender be.' That said, there are instances when you can lend money to friends. If it's a small amount until pay day, or if they have a genuine emergency, go ahead. However, if they're looking for large sums, the best thing to do is to say you don't have that sort of money available - whether you do or not.
This is a touchy subject. Stuff like this is where friends are made/ broken. On one side, you figure "sure why not" because it's your friend. But then you have times when someone will take advantage BECAUSE they're a friend. And things might start getting a bit heated as a result. However, if this is a friend, then you know his/ her personality. You would know whether or not they'd be trustworthy in this regard and decide accordingly.
It depends on which friend is asking. There are a couple of them I would not have a problem loaning money to because I know that they would pay me back. As a general rule, no, you should not loan money to friends. I agree, think of it as you may not ever see that money again if you do it. That way it doesn't effect your friendship if they do not pay you back.
I agree that when you're giving money to friends and family, you should always consider it a gift. Make it clear to the other person that you do not mind if the money isn't given back. That way, there will be no hard feelings if the money isn't returned. It's just not worth ruining a valuable relationship with a friend or a family member if money is borrowed and not returned.
I think it totally depends on circumstances and the people involved. But, I also agree that any money I would lend would be money I didn't absolutely need and I would never expect or want to see it again. We could treat it as a loan, but in my head it would be a gift, so if it never got repaid it wouldn't affect a relationship. I'd like to think if I had a LOT of money I'd "lend" it out often to people I know who needed it, asked or unasked, but I've never been in that position...
This is very true, and you gave out a lot of good tips so thank you. When it's a small amount I just give them the money instead of lending it to them, it's less stress for both of us. When it comes to bigger amounts I just stay away from it altogether. It almost will never end well and it's a whole lot of stress asking for payments.
I think it depends on the friend. I lent one friend 500 pounds, and he paid me back within a month. I lent one friend 50 pound which she explicitly said she would give me back the next day....never seen that money again!
That right there is what I was talking about before when it comes to KNOWING who is trustworthy amongst your friends in regard to money and who isn't.
I have friends like that, too. In general, I just set in my mind that I'll never see that money again, even if she said explicitly that she'll pay me back. That way I don't have to worry my own soul about hounding her for it, and if she chooses to worry about it, then that's on her.
I agree with some of the earlier posts. If the person is truly a friend and needs the money - and if I have it to give without harming my family - then I would give them the money without the expectation of getting it back. I have done this myself and sometimes have been pleasantly surprised when I got the money back and at other times felt good for being able to just help a friend out in their time of need. I would hope that if I ever found myself in a situation where I needed something to help me get out of a bind that I would have some friends that might step up to help me, too!
If they're a really trustworthy, nice, good, loyal friend, then I'll happily lend them money if I know they can pay me back. If it's a friend who doesn't really talk to me a lot, or who won't be able to pay me back, or is using me, then no. For family members, I'll usually lend them money no matter what, unless I'm tight on money or they're one of the family members whom I hate.
I made a promise not to ever lend money to my brother ever again. We've fought so many times and just because of very little amounts of money. He just can't be trusted. I have no problem with either lending and/or giving some money to friends but I don't feel comfortable doing it with big amounts of money.
It is rare that I ever have money to lend a friend in need. However if one of my close friends did need some money to get through and I could afford to lend it to them, I would definitely lend it to them. Though I really do not expect to get the money back from a friend, I like to think at some point in time I will see the money.
I've never had to loan a substantial amount of money to a friend, but I would be very apprehensive about it. IF I did, I would probably make the person give me some sort of collateral just in case they couldn't pay the money back. Now a days, money really isn't that easy to come by. But, yes, in extreme circumstances, I would.
I have done both. Loaned money thinking to get it back because of a promise and giving it knowing I would not ever see it again and they turned out to never come back to me. I have lost 3 good friends over money I gave. With that said, my idea is to think hard and long. Then think again. If there is a way to say no, say it since you will gain so much more respect by helping them sell an item or find a part time job or get a simple loan from a lending institution than giving any money to anyone. It is rare to come out wonderful from a loan of money.
I would say that it would all depend on who it is and how much money they need. I have lent money to friends and family and have received all of the money back pretty quickly. I have also lent money to an old friend and have not gotten it back. I have also told a friend and a family member that I didn't have the money to lend them. I will now lend money out to family and to friends only if I know for sure that I will get it back and if it is something that I can afford to lend out.
I personally don't loan money out. If I have the extra money and it is a close friend or family, I will give it to them. There are maybe 2 people that are very close to me that are exceptions to this rule of mine. They also have never needed to borrow money. People forget, people get greedy and people come into harder times then they were in before. Don't expect to get money back if you lend it out.
