Experiences of giving a family member a loan

[BlueHug]

Does anyone here have experiences of giving a family member a loan?

I don't want to go into too much details. A close family member and his partner asked me for a loan. I wanted to help. I have an online account with revolut so I topped that account up with funds.

They said that they don't get paid for another two weeks.

I am very anxious now that maybe something might happen where I maybe I might not get this money back.

The partner is foreign and using some other things. I witnessed the shopping and I just think if they needed a loan from me surely maybe they could have shopped around for more better value. Like spending 85 pounds on a cutlery set when Tesco or Asda would have more better value.

I am just anxious that maybe I won't get this money back.

This is good advice!

I am interested to see how many people have helped siblings out. I have done the same. You sound like a lovely person op and I hope you get your money back.

In future, it’s best to only give others money if you can afford to give it as a gift.

This is going to sound harsh but speaking very generally, ime, people who ask for loans instead of finding their own solutions, tend to be those who aren’t very diligent about making repayments!

Don't panic, it's done now. If you don't have something in writing acknowledging the loan and agreeing to a repayment schedule then get it, even if its by text. Make sure you keep evidence of when you transferred the money.

I think you’ll have to chalk this one up as a harsh lesson learned. This money had already changed the relationship you have with them.

Never ever make a loan unless it's money you can afford to write off.

Never ever make a loan without a written agreement including a clearly defined schedule of repayment.

Never ever make a loan of money you yourself have had to borrow.

Yeah, you ain't seeing that money again, ever. If they were solvent and reliable enough to furnish their house and only had to wait two weeks until payday, they could have used a credit card. When someone can't get credit from a financial institution, it's because that financial institution believes they won't pay it back.

This is what's kinda hitting me. They told me a two week thing and some of the purchases that they made could have waiting I think.

They didn't buy brand names but I think a lot of what they bought with this card could have waited especially considering that they didnt have the money apparently to begin with.

Like cushions, an expensive cutlery set, other household stuff. I know for me I would never approach someone to ask for a loan to go and buy cushions as part of larger purchase and spend and then the idea of paying someone back. For me I would need to have the money in my account before I make such purchases.

I just don't know if they will take paying me back sersiously.

@BlueHug You need to get tough with them if the excuses start up.

Have you anything written down regarding the request. If push comes to shove, use the Small claims court (easy process, done online).

Should I do some damage control and put a sore ding stop limit on the card. Maybe only allow them another 200 and try and recoup 500 from this.

I am a low paid worker. Not a ceo of a company earning thousands.

Something else I don't like is that the original ask was a thousand. When I said I would help they changed it to 2000. Surely they would have had a budget made already. But now they have gone over the original thousand while shovelling the card away into their wallet keeping it safe for another spend. Apparently payday should be this weekend coming.

I was provided with a few different excuses even before this. One saying they have foreign bank accounts and cards so they will be hit with charges for using theirs and then a pay day wait.

There's just something making me feeling uneasy about this.

My work isn't very good right now either. Worked into exhaustion and burnout.

Now this. I was happy to help them but I just feel uneasy about about things. I think maybe some purchases could have been smarter and even waited until their own pay.

Should I do some damage control and put a limit on the card and try and recoup some of this from them before they spend hundreds more?

I'm now beginning to feel sick because I would have been able to afford 1000 but 2000 is a lot of money. The loan I took out as well would be over a year to pay back. I might need to do this another way actually and pay it from my general account. But then, I would be ok-ish but not great either.

Now I have nothing written down.

Um. YES.

Are they in possession of a card in your name?!? PLEASE say no.

Yes

@BlueHug once you've loaned it, you have no say in how they spend it.

You can, however, stress that they must pay you back, x amount per month so you are not on the hook for the loan repayments.

Although you've said you don't want to service this loan, from your savings, it may be more prudent to do so, I fear you brother may be a cf.

You really should have a repayment conversation, with strict timelines, with your brother immediately.

Sadly, some people have zero compunction when it comes to borrowing and are perfectly happy leaving others in the ....

eta; if it's revolut or monzo you may have more control in limiting amounts.

Yes.

Take most of the remaining balance off the card, and tell your brother you’ve done that.

Say that there’s been a misunderstanding. You had understood from the discussion that the loan was needed for things that really couldn’t wait until pay day, whereas it looks like he’s using it for convenience. Explain that you’re on a really tight budget too, and cant support convenient stuff for them when you can’t budget like that for yourself. Can then say if there’s anything that really cant wait until
pay day then to let you know and you’ll pay for it yourself for them.

And arrange the repayment rate, starting on pay day.

I wouldn't give them a penny more. Don't just put a limit on the card, stop it.

Exactly this. And definitely put a stop on the card!

Stop the card NOW. Don’t give an explanation but say you need the money this weekend when they’re paid.

You should never take out a loan to give a family member money. You're going to get interest in top of that. But ot a silly thing to do.

Draw up a contract with your brother. State a monthly date for payment and amount. Ask for proof they’ve set up a standing order for the monthly amount you’ve agreed to. £200 a month will see the debt paid off in ten months, more if the interest is added. Make the payment date either on their payday if it falls on the same day each month or on 1st of the month.

Being straight forward and business like takes the stress out of dealing with the situation. I had a family member borrow £3000 from me a long time ago. They didn’t pay it back until I had to point out to them I was personally struggling with finances raising my children. Suddenly they turned up with the full amount after two years of watching me struggle after being unemployed. I’d never loan to family again.

I would. Then tell DB your fears and what you’ve done. Ask him what else they actually need, and arrange a suitable budget.

I know from when my own DCs first moved into their first proper homes, they’d grown up with the best of everything and expected nothing less! It took a while to make them realise that we didn’t have any top-end stuff when we were starting out. We made do with hand-me-downs, second-hand furniture and cheap versions of everything until we could save up and replace it with better stuff. It sound like DB’s GF has the same mindset.

I’ve lent to family before and my number one rule is to never lend more than you’d be happy to give I.e. if they never repaid it, I could manage without it.

I would NEVER take a loan in my own name for another person.

What did you agree as a repayment plan?

This is it. There's a nanna up the road with cupboards of cutlery, plates and bowls and stuff would have been given to help them.

Stop that card RIGHT NOW!!!
Sorry, OP, but you’ve been taken for a mug. By your own brother, what a vile human.

I'm not judging how they spend it per se. Apparantly they have a cash flow issue until payday and I think some of the purchases could have waited. I think the spending could have been a little bit better. Over 80 pounds on cutlery. That could have been better.

There was blankets,sheets, towels bought when all of that could have been taken from family and nanna near by.