Loan a friend money?

[Stunt]

So a co-worker of mine (who is also a workout buddy) went to buy his first car as he was just hired at our company after a few work terms. When he went to loan money for the car he had a poor credit history because of an ebay deal that went sour (still under investigation with some guy in Turkey). He is from Pakistan and came to Canada without his parents, therefore he has nobody to rely on for co-signing the financing.

He took on an open loan at a rate of 18% on a minimum period of 3 years.

I recently decided to buy out my car (I have a pet peeve with debt) requiring $13,000 with a rate of 3.8%. I am tempted to help him out and pay his principle and taking on that risk for 10% (better than my investments this past year). Given his salary and cost of living, he can pay off the car by year end ($11k on the car after down payment).

Thoughts?

 

[JS80]

I have an outstanding loan from my good friend (approx $10k). I pay him monthly and timely. We have a very professional contract with all terms and details spelled out.

Make sure he has a secure job and ALL TERMS are on paper, both party signed with thumbprint and tape a piece of his hair to it. Optional is have him also sign with blood.

 

[hellokeith]

As stated above, never loan family or friends money without a written contract.

If you can't get it in writing, then just give the $ away and pray it returns someday.

 

[Kelvrick]

Originally posted by: JS80
I have an outstanding loan from my good friend (approx $10k). I pay him monthly and timely. We have a very professional contract with all terms and details spelled out.

Make sure he has a secure job and ALL TERMS are on paper, both party signed with thumbprint and tape a piece of his hair to it. Optional is have him also sign with blood.

Don't forget his first born as future collateral.

 

[yowolabi]

If you think you're a better judge than the loan companies who decided he's a huge risk. Of course it's only their job.

I guess you know what my vote is. Where's the poll?

 

[FoBoT]

as long as you are ok with never seeing the money again and won't hold a grudge against him

 

[scarfase99]

ditto. bad bad bad idea. can only end bad in 99% of the cases i've ever heard from

 

[gamepad]

Don't do it if you value your friendship with him.

 

[Fern]

No good deed goes unpuinished.....

If you're really after the profit on the points spread - IMHO its too small compared to the risk.

Fern

 

[Stunt]

I would have a written contract...although being here on a green card (from Pakistan) could be a risk.

I would make the payments due the day after his pay (i know his pay days)...hehe.

 

[mrrman]

Originally posted by: hellokeith
As stated above, never loan family or friends money without a written contract.

If you can't get it in writing, then just give the $ away and pray it returns someday.

exactly

 

[bcterps]

Has your friend even asked you for a loan? It sounds like you're seeing this as a business investment (a bad one because of risk involved). There's probably a half decent chance that this will work out ok, but do you really want to take the risk? A written contract is nice and all, but who wants to go through the hassle of enforcing it.

 

[jimbob200521]

If you know for a FACT you can trust the guy, go for it. Like above people have stated, it is preferred that you get the deal in writing.

 

[Stunt]

The guy is very much respectable; I don't see much risk at all.

I use risk management constantly in my line of work.

 

[cubby1223]

Your situation describes the majory of cases on Judge Judy.

 

[Number1]

Originally posted by: Stunt
The guy is very much respectable; I don't see much risk at all.

I use risk management constantly in my line of work.

Don't come back complaining here that you lost your money in a couple of months.

 

[bcterps]

Originally posted by: Stunt
The guy is very much respectable; I don't see much risk at all.

I use risk management constantly in my line of work.

Sounds like you've made up your mind already. Hope it works out for you.

 

[Stunt]

Originally posted by: cubby1223
Your situation describes the majory of cases on Judge Judy.

You watch Judge Judy?

 

[chrisms]

A young guy from Pakistan? The FBI is going to be all over your ass

 

[bcterps]

Originally posted by: Stunt
I would have a written contract...although being here on a green card (from Pakistan) could be a risk.

I would make the payments due the day after his pay (i know his pay days)...hehe.

Written contracts are a joke. A bank reporting him can affect his credit rating. You can't do anything to him except wave your piece of paper at him, or take him to court. Sure, you probably could get your contract enforced in court, but if you even have to think about going down that route, it's already not worth the hassle over a measly 1k profit.

 

[Stunt]

Originally posted by: chrisms
A young guy from Pakistan? The FBI is going to be all over your ass

Not in Canada

 

[chrisms]

Originally posted by: Stunt

Originally posted by: chrisms
A young guy from Pakistan? The FBI is going to be all over your ass

Not in Canada

Tell that to that one Canadian who was arrested and tortured. Forget his name and story but I think he is suing now.

So if you don't mind a bit of waterboarding then this could be a good investment.

 

[Stunt]

Originally posted by: chrisms

Originally posted by: Stunt

Originally posted by: chrisms
A young guy from Pakistan? The FBI is going to be all over your ass

Not in Canada

Tell that to that one Canadian who was arrested and tortured. Forget his name and story but I think he is suing now.

So if you don't mind a bit of waterboarding then this could be a good investment.

Pfff...that guy is shady (has some bad friends), was deported to syria where they tortured him and he had a dual citizenship. He is by no means a typical Canadian; they would never do that (hell, this guy's situation shouldn't have)

 

[cubby1223]

Originally posted by: Stunt

Originally posted by: cubby1223
Your situation describes the majory of cases on Judge Judy.

You watch Judge Judy?

Makes me feel better about myself, that I'm not as dumb as those people.

Honestly, I don't think I've watched Judge Judy in maybe over a year, ever since ST:TNG was put on Spike's afternoon lineup.

 

[chrisms]

Notify the Department of Homeland Security. Put me through to the PRESIDENT OF THE UNITED STATES.