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Have you ever loaned money to a friend?


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So my good female friend needed a loan last year and wanted me to ask my guy friend (who loans money) if she could get a loan of $800.00 from him. He said yes and loaned her the money and he even got collateral from her which was a diamond ring and bracelet, then had her sign a promissory note saying if she doesn't pay the interest within that month he can sell the collateral. I later asked him if I could just take over the loan since I had the money and he said I could if I wanted. So I did. I never told her I took over the loan because I decided it would be better to keep money and friendship separate so she still thinks she has the loan from my friend so believes I just collect from her to give to him.

 

So I have been collecting the interest from her every month plus whatever she can pay in principal then I have her sign a paper saying she paid this amount on this date and the remaining balance. So I haven't received any payment for Dec. so I messaged her that it was time for her payment and she tries to say she already paid for Dec. So we go back and forth and she reluctantly says she'll give it to me this week. She tried to say she gave me the money the middle of Dec. and I didn't have her sign the receipt and I said I always have you sign a receipt. She tried to say that I said don't worry about the receipt. I ALWAYS have her sign the receipt.

 

WTH?? Does she really think she paid me?? I have all the receipts and even have all the money she paid in a drawer. I have NOTHING for Dec. The bad thing about all this is she's only paid $100 in principal since last July and the rest has been to just cover the interest for the month. I stood my ground and said I don't have it. Now I feel like she's pissed off at me. She paid the last Payment at the end of Nov. so I think she's getting confused with Nov./Dec.

 

I hate to see this affect our friendship. Am I handling this right? Any suggestions? Advice? I'm really irritated

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IMO, you shouldn't charge interest to a friend. Or at least not a lot. If her payments are just covering interest and not principal, you're overcharging. You should ask her nicely to double check to be sure if she actually did pay. But if she's adamant that she did, it may be worth to take it as a loss (what's the monthly anyway?) if her friendship is worth more than that monthly payment.

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Usury (/ˈjuːʒəri/) is, as defined today, the practice of making unethical or immoral monetary loans that unfairly enrich the lender. Originally, usury meant interest of any kind. A loan may be considered usurious because of excessive or abusive interest rates or other factors.

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I've loaned money to friends before. I'm extremely, extremely selective about it and don't lend unless I'd be happy enough with the reason that I wouldn't be resentful if they ended up not being able to pay back, or if it was very delayed.

 

How much has she paid in total, including the interest?

 

IMO, it's shallow... real shallow to loan to a friend with interest, especially on such a low amount. $800 isn't bogging down your investment opportunities.

 

I suppose be as rigid as you want, but I don't think at this point there's any half-way between friend and lender. You're either one or the other, and it won't change even after she pays you back.

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He is not a loan shark but he does provide loans to me and his friends at 5% and MY friends or people I recommend at 10%. He doesn't loan out money often. He just conducts loans professional manner that's why he will do collateral.

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I hate to rollover on this loan. Sure she's a friend but if you give someone an inch they take a mile. She knew the terms before she got the loan and agreed to them. This loan was done in a more professional manner. I have a loan out with the same guy friend who loaned her the money and I pay him strictly at the beginning of the month no matter what. He charges me 5%.

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I never told her I took over the loan because I decided it would be better to keep money and friendship separate

 

no, you didn't tell her because you wanted her to remain oblivious to the fact you were making profit off her.

 

if you wanted to keep money and friendships separate, you would have let her conduct the business with the guy without you as the secret benefiting intermediary.

 

and you're complaining she skipped a payment why? because it's dishonest?

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no, you didn't tell her because you wanted her to remain oblivious to the fact you were making profit off her.

 

if you wanted to keep money and friendships separate, you would have let her conduct the business with the guy without you as the secret benefiting intermediary.

 

and you're complaining she skipped a payment why? because it's dishonest?

 

I think it is pretty shady. Now, I know why you didn't want her to know, as you are making 10% off the loan.

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The interest rate is 10%. She knew the terms before she got the loan. I didn't tell her I took over the loan to try and keep the friendship aspect out of it. If she doesn't pay I don't want her to think I'm the one taking her ring and bracelet.

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So if I'm interpreting it right, since she's a referral, she's being charged 10%? If we're talking an APR, you're collecting like $4 in interest per month. Or did you for real refer your friend to get a loan with a guy who makes her pay 10% interest every week or month?

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Ill gotten gain has a tendency to backfire. JMO...
Sounds like it's all gain for her, actually. I can't imagine a friendship having any value to someone if they could look at their friend in debt only to ask themselves how they can make a penny off it.

 

I'm seriously about to laugh the hardest I have in awhile if she's collecting on a 10% periodic interest rate and calling herself a friend. It's obvious she's not contemplating her friendship over a $4 missed interest payment.

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no, you didn't tell her because you wanted her to remain oblivious to the fact you were making profit off her.

 

if you wanted to keep money and friendships separate, you would have let her conduct the business with the guy without you as the secret benefiting intermediary.

 

and you're complaining she skipped a payment why? because it's dishonest?

 

I agree. This is a real mess. I think that in the future, you shouldn't take over a friend's loan.

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Sounds like it's all gain for her, actually. I can't imagine a friendship having any value to someone if they could look at their friend in debt only to ask themselves how they can make a penny off it.

 

I'm seriously about to laugh the hardest I have in awhile if she's collecting on a 10% periodic interest rate and calling herself a friend. It's obvious she's not contemplating her friendship over a $4 missed interest payment.

 

I might be doing my math wrong butI believe her payment each month is $80. Not $4.

 

Which just makes what the OP is doing grosser.

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I might be doing my math wrong butI believe her payment each month is $80. Not $4.

 

Which just makes what the OP is doing grosser.

Yeah, badly worded it but that was the point I was trying to make, that it's definitely not the ~$4 periodic interest it would be if it were a 10% annual rate. In complete agreement, though.
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