Is it okay to provide a reference for a dear friend for.....

[Numberfour]

a loan when you know that she is in SERIOUS money troubles? I have not beena asked to stand as a guarantor, just as to give a reference. Not sure what to do. This friend is in huge debt, to the point that the monthly repayments are more than her monthly income.... and of course this new loan is supposed to help her get out of it.

no

don't do it

tough love is needed i think

for your friend that she is in such serious debt

I would think very carefully and only do this if it was absolutely going to help her and she was willing and able to change whatever it is causing her money troubles.

depends what the reference is asking for.

What were her troubles? I ask because if she is consolidating with a reasonable loan her monthly payments may be much less than they are at the moment, making her financial situaiton much better. So if the troubles are c cards etc it might be a good idea, if she has done this sort of thing before and that is what the debts are this is less good!

She has been helped out of debt in a big way at least 2 times before. At the moment she is caught in those awful payday loan schemes where you borrow money against your salary at huge rates of interest.

she intends to hand some of her debt over to a debt management co, but wants this new one to tide her over!!

Fab, I don't think she can change as she has done this before.

I don't even know whether to reply to her email at the moment - so Ruddynorah, I don't even know what the reference is asking.

Don't do it. You cannot give an honest reference unless you are to say

"I've known X for y years and she is deep in the doodoo financially and shite at managing money - p.s. she can't afford this loan and will default"

Don't let her suck you into her mess. She needs proper advice. Send her to the CAB for proper debt counselling.

In a word no. Do not enable her in such a manner.

She needs proper financial advice and some counsel from someone like the CCCS (not a debt management co who will charge her fees).
Robbing Peter to pay Paul this way is not the answer.

Ok, in that case no!

"she intends to hand some of her debt over to a debt management co, but wants this new one to tide her over!!"

Due to the above I'd steer well clear...she needs to start the debt management plan rather than take out more loans imo.

I'm a master at juggling finances re loans to pay off loans....credit cards to pay off credit cards etc etc but what she's doing knowing that she can't afford the repayments could land you and her in bother.

If she takes out the loan knowing she can't make the repayments she would be committing fraud.

Be aware she may have asked for a reference when what the company actually want is a guarantor.

If you do decide to help make damn sure you know exactly what you are agreeing to - talk to the company yourself and assess their requirements of you.

No dont do it.

I think anybody who goes for a payday loan thereby signing up to 2000% APR has a serious issue with money.

Another loan is not going to help her out of debt.

And I have never known a loan company ask for a character reference. This company will be very dodgy I suspect as she is exploring alternative routes of borrowing, ie not on the High Street, because her credit score is probably so low.

She needs some serious debt counselling, not another loan.

Please don't do this. The best Bank Manager I ever saw was the one who turned to DH & I and said "Sorry, but I can't help you". Until then, DH and I borrowed our way 'out' of debt many times. Each time persuaded to take an extra £x 'for eventualities'. It got so that we were paying charges and defaulting loans, and ended up facing the facts that Bankruptcy was our best option.

3 years later, and DH & I have been debt free consistently since January 2007. We needed someone to help us by refusing to help us.

Just done some googling....

It seems what your friend needs is a 'Credit reference' letter. This is usually supplied by someone she already has a credit agreement with ie credit card, loan company, her bank etc. failing that they will sometimes accept a letter from the employer as confirmation of the persons ability to pay.

So it appears a letter from you (her friend) guaranteeing credit worthiness wouldn't actually be of much use to her. This depends on the loan company though as to what they will/won't accept.

no i would tell her a lie and say that my credit report is so fucked that it would go against her.

i would deffo lie

PS. Just need to say we have no credit cards or loans at the mo due to the economy being so uncertain....we are all cash for the first time in many years so that if the economy goes loopy we won't go under.

I think due to this I wouldn't be advising anyone to take on any 'credit' anytime soon.

oh dear..................... it's as i thought. i had a feeling that to do so would not be a good idea. she is going to be so upset, but i know that i cannot do it for her.

thanks so much for the replies. i do appreciate it particularly because it is not a very Exciting topic!