AIBU to object to my husband taking a large loan for a friend?

In my experience men can be weirdly incautious when it comes to other men and finances. A man who wouldn't dream of spending 10k on a frivolous piece of jewellery for his wife could easily be convinced by "brotherhood" to take a risk like this.

I call it macho sentimentalism - it's about being a provider, and also having some kid of dominance/credo.

My advice is to let the impulse cool a bit and get him thinking everything through. Ok, you want to do "insert ridiculous thing"? Let's check out the finances in detail - and support the dickhead friend to find all the other options available.

As ludicrous as he's being, the safest course is not to fight him, but to help let the fire go out on a drizzle of rain.

Yes, I understand this is the case.

This loan will not have a legal impact on OP, but it will strain their finances as a couple and for that reason put their marriage at risk.

Even if you do this it wont help you get it back. I know someone who did this, solicitor signed, they didnt pay it back. Took them to small claims court, it was decided in their favour. 4 years later they still dont have the money back

Pursuing someone through the court system is hugely expensive

Absolutely not. All your reasons are valid ones. As another pp said, if it's to be secured against the home, you can veto it.

As an aside, why have you 'committed to some very high expenses ourselves for the next few years' if you're in debt and already tied to some loans? You've also taken loans from this same friend. It sounds like nobody in this scenario is responsible financially. You'd be wise to get yourselves financially solvent with some savings in the bank before committing to more high expenditure.

There is being kind and there is being an idiot.

This falls into the latter category. Lending a mate £2000 is kind. Lending a mate who is on the verge of bankruptcy, who cant borrow from banks because they wont allow him, tens of thousands of pounds when you arent multi millionaires yourselves is utter lunacy and I would bet my mortgage that if he goes ahead with this, he will also lose his friend in time too.

Ive seen this happen too many times not to predict this. The building work will stall, it always does, it always costs more than you think it will, it always takes longer than you think it will and if something goes wrong the money will be swallowed up.
Lending friends money is the fastest way to lose them.

Considering this is such a huge sum and not a small amount, I really think I would be telling him that if he goes ahead with this I would have to consider leaving him. This affects you too, it's not a few hundred quid, it's a significant amount that could have a serious effect on your own finances. The fact he is putting this friend before you and wanging on about saving money whilst considering this would make me implode with rage and I genuinely dont know if I could carry on the relationship.

Is the friend going to pay back interest on the loan?

I made a high risk / high reward type investment two years ago where I loaned £50k to someone to help fund a building project. It was an unsecured loan but we had a loan agreement drawn up by a solicitor, witnessed and signed, and with a clause in that I got 10% interest in a year. The project was finished and the loan plus the interest was repaid to me after 12 months. I then went in again on another of his projects - gave him £55k and he paid me back in a further year plus the interest as promised. Some may have called me mad for doing that. But I had an existing knowledge of the successful type of work this man did, the projects he had finished over the years, and I have known him a long time. I did my research, he openly showed me all of his financial information and I decided that I was ok with that level of risk.

there’s a difference.

The situation you describe sounds that this man is desperate for the money and in a difficult situation with multiple creditors. It sounds like the project isn’t financially viable and that he wants your husband to bail him out, rather than this being a structured project that he and DP would both benefit from.

I would never lend money in a situation where there is the level of pressure, like if he doesn’t get the money the project will collapse. And there needs to be something in it for your husband if he’s taking on that risk. Sounds bonkers and potentially marriage ending.

This was my first thought. You obviously have big outgoings already and to be honest are not great with money as you ..as a couple..have no savings. As this is a friend of 40 years l am guessing you are not a very young couple so it is strange you have no savings. This leads me to believe that it is absolute madness to take on further pressure. There is one thing practically gauranteed here and that is the end of the friendship. As soon as you loan someone money you begin to watch what they spend . Say they get a new car or go on a holiday you both think: hey where is my money and the whole dynamic changes.
Saying this my dh was doing a building project: investmest thing and his friend offered him a sizeable amount to finish it but it was savings and was paid back in one lump sum on sale but l was not comfortable until that money was returned. And it could have ended badly.
I loaned a friend 1000 once as she was in dire straits and every time we met she apologised she hadn't got it to return and the whole thing became awkward so l just said there is no need to return it and that brought things bavk to normal. But l had savings so it wasn't a pressure but l did say never again not because she didn't pay but because of the change in the friendship..
Do not do it and begin to save a nest egg as it makes life far less pressurised.
Ask for a meeting with an accountant who hopefully your dh will listen to and see sense.
Its likely this building will eat up money and never get finished as building costs are rising rapidly. It's a recipe for disaster.

I never lend money to friends and i never take debt out for friends. I also never borrow money from friends, or let friends buy things then never give them the money back (if for instance a friend bought a ticket for something I'd always transfer the money straight away).

Years ago I was stupid and naive and got a mobile for a friend, they did a runner and never paid a bill. As a naive 21 year old I was left with the mess to clear up.

Ever since I've always gone with money and friends don't mix well. Anyway friends have family they can ask.

Get the loan signed off legally by a solicitor

And what if something happens that means you as a family need to get a loan but you can't because he's maxed out and borrowed for his friend?

My DH lent a friend some money (against my wishes I might add!) who was supposed to pay it back the following month.

Guess what reader? Not only did he not pay it back then but he STILL hasn't done so 4 years later.
He's been on several lavish holidays since then and buys himself expensive clothes etc and even better he has asked a few times since to borrow more money! 🙄
DH has asked him for it back and been flannelled off with excuses.
The friendship is over.

That's what will happen to your DH and his friend.
40 years of friendship will end in a bitter fizzle.

You are married so liable to pay half if it all goes tits up. No way!!

This is totally mental. Definite no from me. But also, if you're both earning well, maybe that £ per month could be directed to savings? Because earning well but having debt not savings sounds very stressful in and of itself. So I wouldn't necessarily be writing off the need to be more frugal.

I am in the “never lend what you can’t afford to lose” camp.

This would be an absolute dealbreaker for me.

The simple fact here is that if DH has to take out a loan himself to be be able to lend the money, then he can’t afford it. They already have their own debt to service without having to take a leap of faith that the friend will keep up the repayments.

Add to that the fact that the friend has maxed out his credit and high street lenders consider him too much of a risk, what’s DH going to do tell his own lender when they ask what the money will be be used for ? He’ll have to lie, which means the loan has been obtained fraudulently, which rules out any legally binding agreement between them in respect of it.

And there are other creditors. Even if the project turned a profit, DH would have to get behind them and with no proof that money had ever changed hands the chances of getting it back are vanishingly slim. Same goes for DH buying into the project - there are no guarantees that he would recoup any money because he would be a debtor, not a creditor.

OP..I feel terrible for you. You must be worried sick.
As you say that you already have loans etc....Are they in joint names or just your dh ?
If your DH takes out this loan .. how is he going make the payments each month ? I presume that you have a mortgage..This should be the priority payment out of the bank. Then any utilities in joint names..
In preparation for the bailiffs coming...which could eventually happen..get everything in the home in your name..TV, furniture etc. Your dh could ,'sell' it to you for 1p. Make a list and both sign it.
Cover your arse OP..
Ever watched " the Bailiffs are Coming " ?

JFC what a terrible idea. If your DH does do this the financial repercussions for you don't bear thinking about as the friend will not be able to pay this loan back. Divorce him OP and try to untangle yourself financially. This plan is insanity.

Goodbye marriage. This will not end well.

A friend whose project has gone tits up and has maxed out all their borrowing power? This is a terrible idea. Think of the worse case scenario and go from there…

This may help OP -

https://www.experian.co.uk/consumer/guides/partners-debt.html

Just hope for his sake he can’t get the loan. What exactly is he going to say the loan is for because it seems to me he’s going to have to lie. He can hardly say “for a friend as his bank has declined to lend any more” that is fraud. He needs to think twice. I’d be absolutely furious 😡

@hattie43 with bells on.
The dh is a nut.

If DH seems set on helping his friend then he should make a legally binding agreement with friend.

Have the value of the finished project estimated by a real estate agent. Your DH needs to be privy to his friend's loans too.

Only after assessing whether friend can pay back loans with the sale of the project will your DH know whether the loan is fanciful or realistic.

Ask DH to investigate.

If plan stacks up then your DH could offer a loan or ask to be sold a % of the property.

Only agree to DH loaning to his friend if all repayments and servicing costs for loan can be met by your DH without involving any financial help from you.

This is my first thought . Both on high salaries yet have debt and no savings so are already over stretched. No way should husband lend his friend any money . I doubt he’ll see a penny back and the friend will be an ex friend .

Which is a huge red flag - they consider him too risky. Even in the event of the project turning a profit, DH would have to get in line with other creditors, and there would be no proof that money had changed hands.

If DH took out the loan in his sole name he wouldn’t be able to secure it against jointly owned property without OP’s consent. She would have to sign a legal charge. She would have no liability for an unsecured loan in his sole name. In the event of divorce, the courts would more than likely expect DH to pay the loan out of his own share of the assets, since the loan money wasn’t used for the benefit of the family. If l were OP I’d be registering for alerts from the land registry website in case he tries to secure the loan against their property without her knowledge. Land registry would then alert her to any secured loan applications and property searches from lenders.