would you lend a friend $2.5k? (update)

[marquee]

if he put it in writing he would pay you back $3k over a year's time?

there's nothing special that needs to go into the writing that we sign is there? we dont have to have it proofread by a lawyer or anything right? anyone have any experience with this?

edit: well the idea is he needs startup money for his car stereo shop. he's been working on car stereos in his garage for some time now, and recently he's struck up a partnership with a body shop garage where he gets to actually have his own store front. he's looking into buying some stock and inventory, so he's got things to show customers when he comes in. thats kinda how he plans to repay me. reason he doesnt go to a bank? younger people might have a harder time getting loans, or at least thats why i think he's asking me

update:

most people i talked to, here on atot and in RL suggested i avoid letting money get between friends. sounded like decent advice.

so i told my friend that i was sorry, but i couldnt bring myself to get involved. and then the sh!t started to happen. so apparently i had given him the impression i was ok with it, and was now counting on the money. understandably, he was a bit irritated since he would be screwed if i didnt loan him. i originally thought i'd be doing the right thing to keep our friendship well, but now it appears whatever i do, there's going to be a rift regardless.

well damn, i think i'm going to need a drink (or ten)

 

[AgaBoogaBoo]

have a 3rd party view it, like at a bank or with a lawyer

Me? I wouldn't

If he can pay that much interest, a bank should be no problem

 

[LSUfan]

Don't lend money to friends.

 

[FoBoT]

no, i wouldn't charge a friend that high an interest rate, it is unreasonable to payback $3000 for a one year $2500 loan

that is usary

 

[AgaBoogaBoo]

oh yeah, if anything goes wrong and you have a good friendship, that could be ruined

 

[KingNothing]

Originally posted by: AgaBooga
have a 3rd party view it, like at a bank or with a lawyer

Me? I wouldn't

If he can pay that much interest, a bank should be no problem

No kidding, that's 25% interest over a 12-month period. If a bank doesn't want a piece of that action then you certainly don't.

 

[Godfather04]

not really a good Idea........I would make a legal contract of some sort

 

[Jfrag Teh Foul]

Not if you want it back... and a friend.

Tell him to go to the bank and get a note.

 

[kyparrish]

If they absolutely needed the money, and I had it.....yes.

 

[flxnimprtmscl]

Originally posted by: Jfrag
Not if you want it back... and a friend.

Bingo. Money and women ruin friendships. If he's a person you value as a friend I'd say no not so much out of fear of losing the money but fear of losing the friend.

Edit: Also if you're worried about the money having a signed agreement won't do much. For one, if he defaults on your little contract how much will hiring a lawyer to get your money back cost you. Even then, assuming a judge rules for him to repay the money iirc small claims court has no way of forcing him to repay it. Ie. they're not going to garnish his wages for you. I think that's correct anyway. Might want to check into it and make sure I'm right.

 

[dvdrdiscs]

are you the kind of person that wouldn't mind asking for the money back if he's slow on payments, etc? i for one dreadfully hate collecting debts even when i know it's my money. you end up looking like an asshole for asking for the money back if something goes wrong, even though it was he who skipped the payments.

 

[Ephect]

As long as there was a legally binding contract of some sort I would. I know how bad things get. But yeah, if it was a good friend I had known for quite some time and I had the money, I would.

 

[eakers]

yes.

 

[Dissipate]

I would. Friends make business deals all the time, who cares?

 

[marquee]

Originally posted by: dvdrdiscs
are you the kind of person that wouldn't mind asking for the money back if he's slow on payments, etc? i for one dreadfully hate collecting debts even when i know it's my money. you end up looking like an asshole for asking for the money back if something goes wrong, even though it was he who skipped the payments.

he'd give me dated checks, so i wouldnt have to fuss with him about getting the money every month...

i guess the main question is, would i have to go through some financial institution to make it a legally binding document?

 

[ajpa123]

Money always has a way of destroying relationships, even those between the best of freinds.
Think about it before you agree to.

Every situation is different. Maybe if the freind had children and needed the money to protect/shelter them, then i would think about it.. otherwise, No.

 

[SarcasticDwarf]

Make SURE you put something in there about if he does not pay.

For instance: After 1 year he has paid you 2500 back. You have to go to the trouble of hunting him down, going to court, etc....for only 500. You could put something in like $250 for every month after the first 12 or so.

 

[xEDIT409]

Only if he was a close friend... like, I should have known him for atleast 4 yrs. And then, I wouldnt charge interest, no contracts, and i wouldnt mind when he pays me back.

 

[DaWhim]

depends...if my best friend and I have a spare $1000, sure, I wouldn't want them pay me interest either.
best friend = the friend I can die for.

 

[SWirth86]

To a friend? No. To someone else? Possibly, depends on the situation. In some cases people cannot go through banks, hence the high interest rate.

 

[Feldenak]

If I had the money available and he needed it, I give him the money w/o a second thought. I also wouldn't charge interest nor would I care if I ever got the money back. Friends are more valuable to me than money.

 

[Yossarian]

20% APR... are you a friend or a loan shark.

 

[ProUser]

Been there, done that.

Don't do it.

 

[bradruth]

I don't even borrow small amounts anymore. It's not worth the hassle.

Too much "b!tch, gimme ma money!"

 

[ultimatebob]

Originally posted by: marquee

Originally posted by: dvdrdiscs
are you the kind of person that wouldn't mind asking for the money back if he's slow on payments, etc? i for one dreadfully hate collecting debts even when i know it's my money. you end up looking like an asshole for asking for the money back if something goes wrong, even though it was he who skipped the payments.

he'd give me dated checks, so i wouldnt have to fuss with him about getting the money every month...

i guess the main question is, would i have to go through some financial institution to make it a legally binding document?

Out of curiousity, what were you planing to do if one of those checks bounces and hits you with a $25 bank fee? Now would be a good time to think about that...