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

Oh no that is absolutely diabolical, there is no way in hell I’d be supporting this, all points to consider -
— your husband will have to commit fraud to obtain this loan in the first place

— you’ll be having to add this loan payment to your monthly outgoings for a minimum of a year but likely much longer on top of your current commitments

-If this friend has run out of money for his project 12/18 months before completion I would seriously question his ability to organise his funds properly and actually get this project over the line, there’s a possibility that it will still fail even if your husband gives him 30k.

-If your husband ends up being the only person who agrees to lend him money, no doubt the friend will take it and spend it in the meantime while trying to find other ways to fund the project, if these dont come through 30k is not going to get that project finished so the money will just be lost.

-your husband is not only banking on the friend having the integrity to pay him back but he’s also got to bank on the project getting finished and all of the other people this friend is asking also giving the money.

-This is just a huge huge risk for zero reward, you’ve got existing commitments and you’ve got a family to think about and your husband needs to make the right choice for his family, this isn’t in your best interests.

-IF the project gets completed your husband is going to be one of the very last on the list to get his money back because the friend will prioritise paying back the banks first.

Your husband sounds like a really kind man and a great friend but doing this would be absolute lunacy and potentially put your family into a precarious financial
position.

I think he should just be honest with the friend and say he’s sorry, he initially thought he could take out this loan but after going through your finances and taking your current commitments into account it’s just not affordable for him to do without putting yourselves at risk/ it’s not affordable to take on this extra monthly payment at the moment because you’re already having to tighten your belts in other areas.

You’re his wife and he absolutely should’ve spoken to you before telling his friend he could lend that kind of money and I would be upset about that. You’re married and large financial decisions like this need to be agreed by both parties as it will impact the family.

Why at people so concerned about this man 'saving face'?
If he's enough of a grown-up to make decisions about lending 30K, he's enough of a grown-up to own it when he's misjudged and tell his friend so.

I too think this is an insane plan and many friendships have ended due to loans given in trust then not repaid. It would be different if it was savings but if you don’t have any plus high outgoings even on high salaries you are living precariously. Given he will have to lie to a bank as to the reason for the loan plus his already high level of anxiety over money he has obviously not thought this through.

This sounds insane. If the project runs over even more and the friend ends up bankrupt, your DH will not get his money back - and there is no way that will not impact you. Really hope your DH comes to his senses.

Yes @PyongyangKipperbang I’d never do it again (and I did it for someone who has the money) - @Sefal ‘s DH seems intent on going ahead so all OP can do is steer clear/minimse risk. But as others have said, ‘don’t lend money you can’t afford to lose’. A No from me.

This situation is so tricky. If I had person as close as a sibling that needed help I was able to give, to stop them losing everything (going bankrupt), I would like to think I would try and help.

However, in this case it seems your DH hasn't done any due diligence on how secure the project is with the additional finances. As others have mentioned, if the project is in such dire circumstances that they can't get further lending, £30k isn't nearly enough to solve the problem. And the messages from your DH are contradictory. He wants you to tighten belts but has enough spare cash each month to cover the loan?

Your DH clearly has too much emotion tied into this situation. Instead of outright disagreeing with him, perhaps it would be better to try and be a bit more open to the situation, in appearance at least. And approach it more like an investment than a loan. There were lots of unanswered questions mentioned in other posts about the project, that your DH hasn't asked his friend yet.

As high earners, and assuming intelligent people, could you and your DH initially sit down with his friend to go through the finances of the project? Help with an additional pair of eyes, ensure it isn't just throwing more money at a bad investment. If there is a genuine way out of it, you will then be more informed and comfortable. If, as expected, it is a sinking ship, hopefully your DH will see it more rationally and understand why it is a bad idea. And then your DH can focus on helping his friend recover from the situation, without a bad loan also involved.

My sister's exDH forged her signature to borrow against their jointly owned house.

All schools are different. £50k odd a yr for some near me & I'm not sure if that's with vat Inc @ 20%

Very good point.

Given your own debts and school fees its very very unlikely he would pass the affordability checks.

Doesn't get through to him what a dick he is being though, sadly. Because him and his friend will blame it on the bank.

So how is he planning to pay the bank the monthly payments until it’s all ‘paid back’?

OP - do you know if your husband has actually approached his bank about this loan yet? In reality, the bank will want a list of income and assets before agreeing to lend (that’s pretty standard), and may well want security. If they ask for security and your husband can’t give it (e.g. because you won’t agree to security against your own home), that kind of solves the problem - he can’t lend the money to his friend.
Although ideally he should just come to his senses and realise how stupid a plan this is.
(And really the focus should be to shore up your own position as a couple, if you don’t have any savings to fall back on).

When you say the £30k is 1.5 times the school fees, do you mean you pay £20,000 per child, or £20,000 for the two children to attend private school? Just curious, as I live in Canada, so it's rare for children here to attend private school.

Also if your mortgage is up for renewal within the loan term, you won't be able to remortgage with that level of indebtedness so even if everything else works numbers wise, it will still detrimentally affect the family finances

Sweet Jesus is your husband an idiot? Just so I'm clear, your DH is planning on:

1. taking out an unsecured loan for £30k
2. handing the cash to his friend whose project planning is that shit that not only does he need to borrow £30k from your DH but other funds from multiple other people AT THE SAME TIME
3. said friend is already indebted up to his eyeballs so he cannot get lending through regular commercial means
4. there will be nothing left of friend's property over which your DH could secure friends obligation to repay him in the (likely) event of default
5. more than likely he won't go through a lawyer to have a loan agreement drawn up so he has something to use on in the event of default

This is not a sensible commercial decision which ever way you look at it. Is there actually any money in your joint budget to make the monthly repayments without affecting your standard of living? If the answer is no, DH cannot grant the loan.

Has DH thought about how this will be funded if one or both of you are made redundant or take ill. Again, get him to run the figures against the backdrop of those scenarios.

For the love of God do not let him secure that loan over your property or extend your mortgage.

Given friends planning to date, I bet he hasn't figured in CGT to the eventual sale so unlikely there will even be any equity left to repay unsecured loans when (if) the project sells.

I'm afraid that if DH wanted to sacrifice the family finances for this madness, this would be a deal breaker for me.

Good luck OP - I think you are going to need it!

He can get a loan on the house without them even telling you! Happened to me several times 🙄

But it would still impact on your joint finances. Presumably your bank (or whoever lent you the money for your own home improvements) already knows your financial situation and is not going to be too keen on lending your husband another £30k if you are currently maxed out. A £30k loan is going to require monthly repayments of around £600, so if you are already cutting back, being frugal and generally watching the pennies in order to make ends meet, where is the £600 a month coming from?

Will one child have to leave private education? Will someone need to reduce their hours in order to provide childcare? What about holidays, sports clubs, or the existing repayments?

you say a loan of tens of thousands of pounds. I think the bank will want the loan secured against an asset.

Don't do it. We lent money to my husband's very close friend (they also refer to each other as brothers). We then lent him some more against my will because apparently we were absolutely getting our money back in just a couple of months. Years later he's finally started to pay us back but still owes us a large amount of money (this was from our savings), I don't really really to the friend any more and my husband is also done with him but keeps in touch because he wants our money back. My husband was soooo sure this wouldn't happen because they were like brothers and he would pay back quickly, but here we are.

Sorry, @2O26, my mistake. Thank you for setting the record straight. But the rest of my post still stands.

Other way around. "His friend has loaned him money in the past, but it has always been from his savings never anything like this. It’s also been small amounts - a couple of grand here and there."

I think it's the other way -the friend has loaned her partner money in the past. "His friend has leant him money in the past, but it has always been from his savings never anything like this. It’s also been small amounts - a couple of grand here and there."

its easy. I am really sorry old friend but this won't be possible. Rinse and repeat