<p>Recently my husband found himself in a sticky situation where a person he knows – not quite a friend, but more than an acquaintance – asked to borrow $5000 (for college tuition).</p>
<p>This got me thinking about the ramifications of borrowing or lending to friends. The whole thing makes me uncomfortable, especially at that amount. </p>
<p>I imagine these days this problem may be coming up more frequently. What are your positions on this? Does it depend on the friendship? The amount?</p>
<p>Never ever</p>
<p>Maybe $100, but definitely not $5,000. How does the friend intend to repay? If the friend could repay, then the friend should be able to get a bank loan. Lending that amount of money is a quick way to destroy the friendship.</p>
<p>It depends. If it was a close friend, in a heart beat (assuming there’s no outstanding debt or something which would cause me to have trust issues). </p>
<p>An acquantice? Absolutely not, unless there was some sort of contract. Smaller amounts that I could loan without issues, sure.</p>
<p>Neither a borrower nor a lender be,
For loan oft loses both friend and lend.</p>
<p>*Some old time English playwright *</p>
<p>Only to a very close friend or family member. And I would not expect to see the money ever again.</p>
<p>
</p>
<p>This is how I feel about it as well and only if it’s money I can afford to loose. Both times I’ve lent money I did so knowing that I would not be resentful if it was not paid back but both times it was.</p>
<p>Agree with the above - only a very very close friend or certain family members (and there are family members I would and those who I would not). And only amounts I could afford to not get back. Certainly nothing like $5000. </p>
<p>To be honest I could not conceive of ever putting a friend in such a position by asking to borrow such a sum of money from them.</p>
<p>$5,000 to “not quite a friend?” Heavens no! Doesn’t he have any quite a friends?</p>
<p>Was there any reason given for why he has the need to borrow this college tuition money? A CD that is tied up until after the date the tuition is due? Loan money that won’t fund until school starts? He needs to talk to the financial aid department of the school in question. They would be in the best position to give him some relief.</p>
<p>I only lend amounts that I can actually afford to GIVE. That way when the borrower can’t pay me back (and honestly they can’t pay me back or they wouldn’t have asked for the “loan” in the first place), I’m fine with it.</p>
<p>$5000 is out of my range for gifts.</p>
<p>I agree only lend it if you are okay of never seeing it again. I have lent money to friends, they have all re-paid it, but I only lent when I knew that I would not resent them if they didn’t pay it back.</p>
<p>It would be a gift. If they wanted to pay it back, that would be okay but there would be no need to or strings attached.</p>
<p>ditto with sentiments above. Definitely not 5k for tuition! (lol… get a loan!) Years ago my very own dear sister talked to me about a loan for her planned kitchen renovation. Initially I said sure, but after thinking about it… interest rates were low at the time and they could easily qualify for a home equity loan, I suggested it would be easier, cleaner, and better for all of us if they borrowed from a bank, which they did.</p>
<p>The short answer is : no
The longer version: of the many friends and family members both H and I know there is only one person that we would feel comfortable lending money to, even large amounts. Only one, out of hundreds.</p>
<p>The way I look at it is that I do not lend out money if there would be big problem if it is not repaid, because frankly that is the risk you take. What if he gets hit by a car, becomes ill or other catastrophe hits? Not to mention if he just screws up? Yes, I would lend the money to my kids or mother for good purposes simply because if the money cannot be repaid, it will be absorbed by us and not long term issues would arise. </p>
<p>My son lent a friend $400 as a gap loan till the end of the month. The young man was severely injured in a car accident and has never been able to repay him. It was a big problem for my son as he really counted on the money to be returned within a few weeks and he had to take the consequences. He was sure it was a solid deal but nothing in life really is. He should not have lent the money when he could not afford it’s loss. </p>
<p>So that is the criterion I use. If it’s gravy for the loan to be repaid, then I’ll give it out. I don’t tell the recipient that, but it is a mental state for me that needs to be there for me to lend money. So I would lend my brother $5K and more, all I can give, if it’s for a life saving surgery, even knowing that it may not be returned, because it is worth the money. Wouldn’t lend him $5K for tuition or other things that I am scraping to pay on budget myself, that I am loathe to go into pension monies and emergency funds, etc to pay for myself and my kids. I’d be furious if I lent it to him and for any reason it is not returned.</p>
<p>In this case the answer would be no.
Some people have a firm policy. For me it would be on a case by case basis. I would loan it to some people and not others. Though of my family members the one’s I would loan it to are the one’s who would not likely be in one who would ask or need a loan.
I have on several times loaned money to my house cleaner. I would not loan her $5000 but have over the 20 yrs I have known her loaned her amounts from $100 to $1000. I was willing to do the $1000 since I knew what it was for and she had always paid me back on previous loans. She always paid me back in a timely manor. I trusted her and I also figured if she didn’t pay me back it was money I could afford to lose.</p>
<p>I agree with posts 3 and 10. I could loan $100 because I could afford to lose that much. More? No way.</p>
<p>There are people in the business of lending college loans to creditworthy borrowers. I’d urge friend to see one of them. If a pro lender thinks him not creditworthy then that would make it all the more foolish for me to loan to him! If they can’t trust him why should I?</p>
<p>Lending businesses have overhead to pay for so it may not be worthwhile for them to make small loans.</p>
<p>I wouldn’t do it either. Even for family, I have a rule of no lending. I have given my brothers gifts of money at times over the years but made it clear that it was a gift rather than a loan. I sleep better this way</p>
<p>I have lent substantial sums ($1,200-$5,000) to a friend and to a family member. In both cases I have been repaid, no problem. That said, I would definitely lend money, but only if I could afford to lose it. I have also borrowed money from a friend and from my parents. In all cases there was a clear and realistic repayment plan, and there was no problem with repayment as scheduled. In one case I paid interest.</p>
<p>My mother’s view is that it is fine to lend money to a child, for example, but you should establish a repayment schedule and stick to it, even if it is only $10 per month. Saying “pay me back when you can afford it” almost always ends in trouble.</p>