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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To lend my friend money?

167 replies

mscrooge · 23/08/2023 07:16

Friend is in really bad debt. He’s overwhelmed with interest fees. He lost the money through an investment in his own business, that wasn’t successful.

I do quite well financially, although I don’t have as much saved as I should (expensive divorce).

We just got into a lighthearted conversation about whether I’d be able to lend him some money, interest free, to clear some of the debt, but during the conversation I realised I actually could.

I am completely against either borrowing or lending money but for some reason I feel unexpectedly comfortable with this.

He has never ever been anything but super reliable, money-wise. I let him use my card for a while when he lost his while travelling, and he paid me back every single penny via bank transfer, immediately after he’d made each payment.

It’s a vast amount of money though. A year’s salary for some people. I can afford to lose it but I certainly hope not to!

We would have legal docs drawn up, which would stipulate the terms. I already have the drafts and I’m pretty comfortable with them.

I’m trying to think it through properly before I go ahead as I don’t want to be an idiot.

Assuming he pays me back, the only thing I have to lose is the interest I’d make having it in the bank, but it’s not a big enough amount to concern me.

What am I not thinking of?

OP posts:
velvetandsatin · 23/08/2023 11:20

mscrooge · 23/08/2023 11:18

This is hilarious. I give up on MN, I really do. I didn’t say it was the amount of an average salary, anywhere!

And no I don’t earn £900k a year, but I certainly know other women who do!

Show quote history

You did say, in you opening post: It’s a vast amount of money though. A year’s salary for some people.

Original poster
mscrooge · 23/08/2023 11:22

velvetandsatin · 23/08/2023 11:20

You did say, in you opening post: It’s a vast amount of money though. A year’s salary for some people.

Show quote history

Correct…a year’s salary for SOME people. Not for the average person.

OP posts:
BacktoBeginnersFran · 23/08/2023 11:24

I appreciate your a very high earner OP, and don't have an issue. To be honest if it's such a small sum to you and such a big sum to him that even the interest is killing him, then I think I'd give him the money. Make it a loan for tax reasons, but don't expect repayments.

Flipflipmania · 23/08/2023 11:26

Well “some people” have an annual salary of £2.5k or less a year!

So it was a daft thing to say. What’s a “vast amount”? A vast amount to some is bugger all to others

but if you describe it as a “vast amount” then…. Sounds like you mean a vast amount to you, which probs my means it would be daft to lend it

BarbaraofSeville · 23/08/2023 11:26

You did say, in you opening post: It’s a vast amount of money though. A year’s salary for some people

But that's not the same as 'the average annual salary'. Just like Michael Gove didn't understand that not all schools can be above average, you seem to be missing that some people earn less than average. Some people also do not work full time.

So the amount of money could be £10k or £20k, ie NMW part or full time. Which would mean that the OP earns £250k or £500k.

Which as we know are perfectly normal salaries on MN, indeed are 'not that much' that the OP can just give away £10/20k without thinking about it.

Genevieva · 23/08/2023 11:26

If you want to give your friend money then give it, with no expectation if it being returned. Lending money will ruin your friendship.

ZorbaTheHoarder · 23/08/2023 11:26

So even selling off his house wasn't enough to pay off the debt, and yet it's only a couple of weeks of some people's salary?

I think the main issue is that it would change the nature of your friendship with him, whatever the outcome. And it wouldn't be a change for the better.

Surely he has other options for paying off the debt, instead of relying on you?

Flipflipmania · 23/08/2023 11:27

I had no idea what gender you are 😐

benfoldsfivefan · 23/08/2023 11:29

The fact that OP is a very high earner doesn’t change anything for me. She still doesn’t know what the future holds and that some catastrophic events could happen in the future in which she’ll need immediate access to the money she’s given or lent. There’s also the risk of losing the friendship if he doesn’t pay back.

Flipflipmania · 23/08/2023 11:29

BarbaraofSeville · 23/08/2023 11:26

You did say, in you opening post: It’s a vast amount of money though. A year’s salary for some people

But that's not the same as 'the average annual salary'. Just like Michael Gove didn't understand that not all schools can be above average, you seem to be missing that some people earn less than average. Some people also do not work full time.

So the amount of money could be £10k or £20k, ie NMW part or full time. Which would mean that the OP earns £250k or £500k.

Which as we know are perfectly normal salaries on MN, indeed are 'not that much' that the OP can just give away £10/20k without thinking about it.

Or could mean the op earns £25k and her view of a “vast amount” is in line with her salary

we really have squat all idea 🤷‍♀️

velvetandsatin · 23/08/2023 11:31

It has morphed from "It's a vast amount of money though. A year’s salary for some people" to Pffft! "It’s about 2 weeks’ salary for me."

agent765 · 23/08/2023 11:34

He sounds like an irresponsible knob.

Say goodbye to any money lent to him and watch him disappear into the sunset.

You've already lost money to one man. Don't lose any more to another.

Ladyoftheknight · 23/08/2023 11:36

Get him to speak to step change/citizens advice. He needs to manage payments better.

If you really want to help him, I'd suggest a fixed payment to him of less than £400 a month to pay for his food or electric bill say. Then he can increase his monthly payments to the lenders.

That way, if he suddenly can't pay you back (if he becomes ill, loses job, etc) you lose less. He also has the responsibility of paying back his debt himself.

uncomfortablydumb53 · 23/08/2023 11:36

No, do not do it
From his financial history however well intentioned he may well not pay you back
It will sour your friendship and frankly he should be capable of arranging repayment plans
Keep your money, especially important as you've been through difficult financial circumstances yourself
Don't mention his finances even in casual chats
BTW, I have learnt the hard way

Ladyoftheknight · 23/08/2023 11:39

Ah, if it's 2 weeks salary for you I'd imagine it's under or around 10k right? My husband is a very high earner and earns slightly more than that, so I can't be too far off.

If it's under 15k, it's manageable. Under 20k, maybe lend £5k to take a chunk out.

ihadamarveloustime · 23/08/2023 11:39

Could you gift the money?

If the answer to that is no, then you can't afford to lend it to him.

And you will screw up your friendship permanently over it.

OhComeOnFFS · 23/08/2023 11:39

I think it would be helpful to know how much he owes and how much his repayments are and what the interest rate is.

Also how long have you known him?

How much savings would you have left if you lent him the money?

How old are you? That would make a difference to me as if you're older and might retire within the next ten years, I'd say no, don't lend him anything.

Zoreos · 23/08/2023 11:47

Your friend needs to speak with an Insolvency practitioner as a matter of urgency if he’s struggling to stay on top of his interest and repayments. There are multiple avenues that a person can go down and lots of charities that can help direct him to the right place in his situation. That would be the most kind thing you can do as a friend . Lending him money may not fix the problem but it could exacerbate it if in reality he’s actually not all that financially reliable/stable. At this point being sensible the best thing you can do is reassure, encourage and support emotionally to legally take steps to sort this out. As others have said never a lender or borrower be although it’s really admirable you’d go to such lengths for a friend.

InsectBiscuits · 23/08/2023 11:51

2 weeks post tax salary?? So you'd only have to work 2 weeks to gain the same amount of money in your bank account?

ChristmasFluff · 23/08/2023 11:51

Yeah, I have given friends and family money many times. I NEVER lend money.

If someone wants to return my money when they are back on their feet, it's a happy bonus, and some have. But I always make it clear it is a gift.

This is by far the best way to do it, as it really focusses the mind on whether you can truly afford to lose the money - because how are you realistically going to get it back if he defaults? You'd have to pay to enforce the contract, (plus pay to set one up in the first place), and it could well be throwing good money after bad.

IMO, if you can't afford to give it as a gift, you can't afford to lend it either.

Original poster
mscrooge · 23/08/2023 12:01

InsectBiscuits · 23/08/2023 11:51

2 weeks post tax salary?? So you'd only have to work 2 weeks to gain the same amount of money in your bank account?

Correct, yes.

It still feels a large £ amount to give someone though. I haven’t always been a high earner so it feels vast. My brain never really caught up to my earnings. 5 years ago I was earning an average salary. I hadn’t considered it was two weeks’ salary until a PP asked.

OP posts:
tryanotherone123 · 23/08/2023 12:12

mscrooge · 23/08/2023 12:01

Correct, yes.

It still feels a large £ amount to give someone though. I haven’t always been a high earner so it feels vast. My brain never really caught up to my earnings. 5 years ago I was earning an average salary. I hadn’t considered it was two weeks’ salary until a PP asked.

Show quote history

If you can earn the money you are planning to lend in 2 weeks I don't see why you don't just five it as a gift and stop all this other nonsense. You really don't need to understand anymore than you do, the risk to you is almost negligeable and there really is no conceivable reason why you would need to ask for it back in an emergency or otherwise.

I gave a friend £1800 because covid hit them financially no questions asked. That's a months salary for me and took me a good while to save. I think you can manage the a gift. You'll feel better for it and your friend won't be beholden to you.

SnakesandKnives · 23/08/2023 12:15

I’ve lent several people money over the years with the view that I could afford to lose it if they didn’t pay me - basically taken the Judge Judy recommended approach.

all have paid me back and it’s not been awkward with anyone.

i think it totally depends on the people involved. I have several friends I definitely wouldn’t do this with as well!

i think I’d be quite sad if I didn’t trust close friends (close enough for this convo to come up) enough to help them when I easily could and not really suffer if it went wrong.

all that said, many more people have bad experiences of lending friends money than good ones it would seem from this thread…..

SlightlygrumpyBettyswaitress · 23/08/2023 12:45

The only time I felt moved to offer was a friend who needed to divorce her arse of a husband. But I Gifted it, not lent cos that way it never impacted our friendship which I valued. And I was absolutely clear that it was a gift.

Ihadenough22 · 23/08/2023 13:48

Personally I would not lend him money. Instead I would encourage him to contact stepchange as they can give him help and advice. They may be able to chat to his creditor's and get the interest/additional charges stopped on his borrowings. They will work out a budget plan for him to help him get out of debt in X period of time.

The reality is that you have a good income but you had an expensive divorce. You need to keep what ever savings you have as you don't know what will happen in your future. Also if you invest your savings long term it benefits you more.

I saw what giving money to a friend did to a friend of mine.

A few years ago one of my friends won some money. They gave a friend £1500 of this and bought them on a cheap holiday. The friend was going through a hard time back then.
A few years later the same friend came into money. They never said anything to my friend but suddenly were driving a far better car that was 9 years younger than their previous car.
They never offered my friend as much as a £ 100.

My friend also give them advice and they have refused to listen to it. The friend that got help from my friend now spends hardly any time with my friend and always has an excuse when my friend tries to meet them. My friend has had enough and I know they will be having it out with this friend soon.
My friend told me that they were sorry for helping out this person in the past and that doing this won't make a friendships better. The person you help will just take you for granted and down the line there is a good chance they will let you down.

My friend has put a lot of work into improving their own life and learning to say no more since this happened. My friend told me I have to consider my own life and I am doing things now that will benefit me long term. It not been selfish but its having boundaries in place.

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