Is Lending Money to Friends a Friendship Killer?

From the Community…

• 
  Posted by opiniononly Thu Oct 22, 2009 10:39am PDT

  Put it in writing with a payment schedule, due dates and amounts. Treat it just like a bank loan, that way if he defaults on paying you, there is at least a signed agreement as documentation if you would decide to pursue repayment in small claims court.

  Be careful with this. He may have "talked" about his financial situation in the passive/aggressive hope that you would "volunteer" your money...that let's him off the hook if he's the type that might decide it was a gift, not a loan. Maybe he is manipulating you, but then again, maybe he isn't trying to make you feel like you should offer to help out. Only you know his character.

  Keep your money safe for YOUR financial security. You can't guarantee if he will pay you back by your tax deadline, so before you decide to part with any of your money, make sure you can cover your own obligations without any repayment from him...and then decide if you can still afford to part with a fairly significant amount of cash.

  And, yes btw, it can get stressful while the loan is out there. You might start feeling resentful if he is buying stuff you don't consider essential in lieu of giving that money back to you and a host of other problems may develop.

  You don't mention why times are so tight for him right now, but pay attention to those reasons. Unexpected unemployment with financial problems is a lot different than excessive credit card debt from impulse/carefree spending habits. The first situation does warrant consideration to assist; the second...well, some lessons are learned the hard way.

  If you do it, get it in writing.

  Report Abuse
• 
  Posted by Ashley Thu Oct 22, 2009 10:46am PDT

  There is really no such thing as "lending money." My advice (especially if they didn't ask for the loan) is not to loan money. Giving money is a different thing. If you can't afford to give them the money, the problem is going to come when you're waiting to get it back. Assume you WILL NOT be getting it back and give the money as a gift.

  I never loan money, clothes, or cd's because I know the cd's (IF I get them back) are gonna be scratched, the clothes (IF I get them back) are gonna be stained, torn, stretched, etc., and the money (which I probably WON'T get back) is gonna cause awkwardness.

  Report Abuse
• 
  Posted by Cindy Thu Oct 22, 2009 11:02am PDT

  I wouldn't lend him any money you might need later. If he ends up unable to pay you back in time, you'll end up being screwed as well. You have to protect yourself first. Calculate how much you need for taxes, keep a little extra for emergencies, then offer the extra amount if it's not more than you're willing to part with. As opiniononly said, keep documentation. If your friend is the type to spend money frivolously, I wouldn't lend to him. These are hard times and people you don't expect to screw you over sometimes do, so use your judgment and I hope things work out for the both of you.

  Report Abuse
• 
  Posted by Cindy Thu Oct 22, 2009 11:30am PDT

  I got my roommate/best friend to lend me money. I was buying a house and my boyfriend gave me some money for the down payment. I broke up with him before the purchase was final and I had to give him the money back. I didn't want to renegotiate the terms of the loan because any small thing might prolong the purchase where I needed to move out by the end of the week. If she didn't give me the money, we both wouldn't have a place to live, but even then it was difficult convincing her to lend me the money. I'm financially stable and she wasn't doing anything with her money. She's a bit of a miser. It was the end of July and I told her I'd pay her back by March. For me, the awkward part was asking. It's not awkward now and I think I can pay her back at the end of December. Every situation is different.

  Report Abuse
• 
  Posted by Katie P Thu Oct 22, 2009 12:45pm PDT

  Do not lend money to a friend that you can't afford to do without, especially such a large sum. It will do nothing but harm your relationship, because you have no guarantee that he will be able to pay you back by the time you need the money for taxes. Just don't go there. Try to help out in other ways, if you really want to, like buying him some groceries or giving him a gift card for gas.

  Report Abuse
• 
  Posted by yummy23f_bunny Thu Oct 22, 2009 2:39pm PDT

  NO ... NO... NO ... dont lend money to anyone .. it causes problems in the future.

  Report Abuse
• 
  Posted by Rowena Fri Oct 23, 2009 1:48am PDT

  if hes a really good trustworthy friend go for it. obviously he's not since you already said you know you'd feel awkward until he paid you back. I lent my boyfriend money when i knew he needed it without him asking. it wasn't thousands but it was in the hundreds. i didnt have anything to worry about in fact he gave me the money without me even asking for it. As for your case i would not lend him the money since his finances are not looking too good i would just let him deal with it. Offer to hold a garage sale of his items so that he can make some money. give him tips like "dont eat out" "dont buy unnecessary crap". Lastly, do NOT feel bad for his financial situation unless you are getting married to the guy...he put himself in it and he's got to figure a way out. and to Opiniononly who said make him sign a note and is he defaults just take him to court...you might as well kick him in the a-- and say "now you owe me x000"

  Report Abuse
• 
  Posted by ZonaSun Fri Oct 23, 2009 9:23am PDT

  I lent money to a friend a long time ago.

  My experiance:

  My best friend was never the greatest at handling her finances.

  At some point in time she came up short and couldn't pay her rent.

  I lent her money and I told her that I needed the money back by tax time - April. This gave her several months to set aside a few bucks here and there to pay me back - we're only talking about $600.

  I reminded her in Mar and then again when April rolled around.

  This told me that she didn't give a crap about my financial situation and that I needed that money to pay my bills. I felt betrayed and felt that I had made a huge mistake by loaning her that money.

  Over time she did pay me back, but at her leisure. Needless to say this relationship diminished quickly because I felt that she couldn't be trusted and was disappointed at her lack of judgment.

  Report Abuse
• 
  Posted by Jett Fri Oct 23, 2009 1:45pm PDT

  Here's my advice: Ever heard of the book "Christmas Jars"? It's about people who collect their extra change in a jar all year long and then, on Christmas Eve, leave the jar on the doorstep of someone in need. If you're worried your friend won't be able to pay you back and then will feel guilty about it, while you become more and more annoyed that he hasn't paid you back, then I suggest you do something like the Christmas jar. Give the money anonymously. There will be no way for him to know it was you, so he won't feel guilty if he can't pay you back, and you will feel great about helping someone without any expectation of payback.

  Report Abuse
• 
  Posted by Coug Girl Fri Oct 23, 2009 2:16pm PDT

  Just be prepared - once you lend money to friends, they seem to always come back like you're a fountain of money. I did it once, and even though they'd pay back, they still kept coming back for more. So if it's a little bit you can live without for a while, that is fine. But if it's money you're saving for down the road, do not lend it out. If you're financially okay, yet lend the money out, you should not need to stress just in case they do not pay you back in time.

  Report Abuse