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Lending friends money

Would you lend your friend money? Say if they are in a lot of trouble and they really need a large amount of money out of a problem. They know you have that amount of money and they are asking to borrow that sum of money. This is a good friend of yours. Would you do this for him or her? If not, how would you respond.

by Anonymousreply 3801/07/2013

Under most circumstances, I would not lend money. But if it was truly an emergency, I would get it in writing with them signing something that they agreed to pay me back by a certain date.

by Anonymousreply 101/07/2013

ditto r1

by Anonymousreply 201/07/2013

I've done it before and it's worked out well -- that is, they paid me back on a timely basis. But it's also gone badly -- they didn't pay me back when they said they would, and I sat by while they spent money in all sorts of frivolous ways. That can eat at you. I've also been stiffed -- after loaning $2,000 to someone I thought was a really good friend, he suddenly wouldn't return my phone calls, emails or texts ... and he never paid me back.

Now, I would only lend money to people whose character I trust -- meaning, I've seen how they manage their money and we've had discussions about responsibility and integrity.

by Anonymousreply 301/07/2013

No, I would not lend a large amount of money to a friend.

"Lending" turns out badly about 97% of the time. Your odds of getting your money back are better in a casino.

by Anonymousreply 401/07/2013

r4, then how would you respond to your friend then? Remember, he/she is a very close friend and is in a terrible situation. And he/she knows you have that sum of money that he/she needs.

by Anonymousreply 501/07/2013

I would simply explain that it's my policy never to lend money. Period, end of story.

by Anonymousreply 601/07/2013

Can you afford to lose the money, OP?

by Anonymousreply 701/07/2013

R5 Who gives a shit if they're a close friend? If they need the money that bad and truly intend to pay you back, then they'll have no problem putting it in writing that they agree to pay it back by an agreed date.

by Anonymousreply 801/07/2013

R6, then what if your friend stopped talking to you after said incident because you didn't come through for them. How would you react? Or would you not care?

by Anonymousreply 901/07/2013

R9 Then they never really saw you a friend anyway, just as an ATM.

by Anonymousreply 1001/07/2013

It would depends on how much money and what it's for and how close the friends are.

by Anonymousreply 1101/07/2013

If it's important you get the money back the question to ask is how and when they will pay to back. If they don't have the means to pay the loan back there will be a problem.

by Anonymousreply 1201/07/2013

[quote][R6], then what if your friend stopped talking to you after said incident because you didn't come through for them.

If the friendship was contingent upon my willingness to provide cash on demand, it wasn't much of a friendship in the first place.

by Anonymousreply 1301/07/2013

No one *really* knows that 'you have the money to loan'. Tell him 'No.' and if he pushes you saying he knows you have the money, then just say, "I don't anymore. I loaned it to my brother/sister/mother' or " I need/needed that money for an emergency of my own".

And if they still push it, then say that the discussion is over and you've said no. And if they're that unhappy about it and stop talking to you, then lesson learned FOR YOU.

by Anonymousreply 1401/07/2013

R14 back, as often said on a million other threads on this topic ..... if you can afford to GIVE it to him with no expectation that you'll ever get it back ...then GO FOR IT.

But a 'loan' between either friends or family is NOT a good idea. If you can afford the gift, then proceed.

by Anonymousreply 1501/07/2013

When it comes to friends, I use the following guidelines: 1) never, ever give more than you can afford to lose in its entirety; 2) never, ever give more than would bother you if your friend never paid you back; 3) Never think that a loan puts you in a position to be judgmental about your friend's spending choices; 4) Do not couch the loan as a 'loan' at all.

To expand a bit: It is important-- if you value the friendship-- to consider what will happen if you never receive a nickel of it back. If it would put you in a financial bind, then absolutely do not extend the loan. If it would make you angry with the person or otherwise somehow cause a rift in the friendship, then do not extend the loan.

My final thought is that it really shouldn't be thought of (at least by you the giver) as a loan at all. Give generously and warmly, and consider it a gift. Tell the person not to worry about it and to pay you back if and when they can, and never say another word about it. If they ever intended to pay you back, and they are able to, they will.

After the money is given, you should go about treating your friend in precisely the same manner as you did before, regardless of what is (or isn't) returned.

Completely disagree with putting anything in writing, at least if you have any expectation of maintaining a friendship with the person. If you are so worried about being paid back, or if it will make you think less of the person or trust them less, then do not give the money at all.

I think it is much "cleaner" in a friendship to either say you cannot loan any money, or to loan what you can and assume you will never see it again and be truly comfortable with that. Anything else is likely to create complications with bad feelings on both sides.

by Anonymousreply 1601/07/2013

I've lent and lost a few chunks here and there when I had it. I'd say dispassionately that nobody should know or assume your financial situation and therefore shouldn't ask or even think about it. It might sound naive but actually it isn't. It's brutally frank. It's all downhill from the asking and the answering.

by Anonymousreply 1701/07/2013

I generally don't loan money, except really small amounts. The crucial point is how much I trust this person to be responsible. Any of my irresponsible siblings? I'd say "Sorry, I don't feel comfortable with that. I'm sorry you're having rough times." Sorry to be so cynical, but I usually find people in need of loans are usually people who make bad choices and are not responsible. In which case, I won't enable them. But if I absolutely trust them, I absolutely help them out.

I had a close friend who borrowed my entire quarterly sales bonus when I was 19. It was only $200, but at that point in life, it was a lot of money, and represented 3 months of sales for me. She said she'd pay me in a few days when her bf got paid. He had plenty of money but never gave it like he promised, intending to drive a wedge between us so he could control her and she'd have no friends. It did drive a wedge, as I felt my lifelong friend stole my money. We didn't speak for 2 years until she finally paid me back.

Before the loan, I had excitedly told her about my $200 bonus, which was the precise amount her bf convinced her to borrow from me. I learned through that to be careful when talking about money I have. I always downplay it, because I have friends with less than me, and in desperate times, they might not be able to help but ask for a loan that I'd not give, if they knew I was flush.

by Anonymousreply 1801/07/2013

Suze Orman says to never lend money--only give it. If you get paid back, great, but expect not to.

by Anonymousreply 1901/07/2013

I agree with r18. I'm self-employed as well as a landlord of a few small storefront properties and have developed a pretty good sense of who really needs a hand up and who is just playing you because they think you can afford it.

A few years ago I "lent" $5,000 to the best friend of my elderly aunt. Long story short, my aunt broke a hip and her waste of skin son basically dumped her in a nursing home to die. Her friend was there for her every step of the way and I felt she deserved to be compensated for that. But here's the kicker...when the dust settled it turned out my aunt had left her friend $25,000 and the rest to her jackass son, neither of whom seemed to see any reason to pay me back. In the meantime I had health problems of my own that landed me in the hospital to the tune of $7500 before my insurance kicked in.

So I guess the moral of the story is would they do the same for you if the shoe were on the other foot? In my case the answer turned out to be no. Lesson learned.

by Anonymousreply 2001/07/2013

"R4 then how would you respond to your friend then? Remember, he/she is a very close friend and is in a terrible situation. And he/she knows you have that sum of money that he/she needs."

As someone else said, I would tell him/her it was my policy to never lend money. To anyone. And what kind of a "terrible situation" could warrant that kind of request anyway? "My car is being repossessesd!" or "My dealer threatened to cut off my fingers!" ? The answer would still be No.

by Anonymousreply 2101/07/2013

I have two stories.

I loaned a friend about 3k to move into a new place 2 years ago. I was paid back in 2 months. He had just gotten a new job after struggling for months and was 3k short to be able to secure a new apartment.

I had another friend, (a flaky one) keep telling me how he was going to have to sell his car to make his rent, how he could not afford groceries (hint hint).. When I told him I could not loan him any money, I stopped hearing from him. He totally cut me off. In fact, he *did* sell his car, and is still broke and flaky. He refuses to take any jobs "beneath" him, but would rather sell his car (in LOS ANGELES!) Moron.

by Anonymousreply 2201/07/2013

r21, what if said friend is currently held hostage and basically phoned you to say that if somehow he doesn't cough up the amount until a certain time, something bad will happen to him. And he left a message on your answering machine and you haven't returned the call because you really don't want to put forth that amount of money. And this friend is your best friend.

by Anonymousreply 2301/07/2013

I think most DL's would have o get the money from their mothers, first. And yes, I am talking about the elder gays here.

by Anonymousreply 2401/07/2013

For some friends, yes; for others, no. The amount matters, too. If it were a large sum for me --beyond what I was comfortable losing-- it would be all the easier to say 'No' if I had any misgivings.

I'd be a lot more comfortable lending to someone who wanted to buy a house or start a business or improve their situation, and less comfortable with someone who was deep in a hole of debt (from which it's all the more unlikely than that will not be able to extricate themselves -- or ever be in a position to repay me.)

[quote] then how would you respond to your friend then? Remember, he/she is a very close friend and is in a terrible situation. And he/she knows you have that sum of money that he/she needs.

How hard it is to explain that your "available cash" is central to your own future and that you're not in a position to lend the money? Adults can say No, and take No for an answer, too. Anyone who asks for money holding out their friendship as a ransom isn't a worthy friend.

by Anonymousreply 2501/07/2013

If I can afford it and the friend is good enough, I will just say, I'm sorry I just can't loan you "x" right now, but what I can do is give you "y", completely as a gift.

I think if you do that there are a number of positives. You're being generous and helping so that feels good to you. Your friend sees that you're being kind. You have no worries about getting repaid. I also think you're less likely to be asked in the future, because most of us don't want "charity" from our friends.

Of course if this is someone you really love, who has absolutely no other options, and is in serious trouble I would really consider helping to my fullest extent.

by Anonymousreply 2601/07/2013

"he/she knows you have that sum of money that he/she needs."

Wait, this other person knows they *I* have money that he/she NEEDS?! Sorry, pal, when the entitlement escalates to that point, the so-called friendship is OVER.

by Anonymousreply 2701/07/2013

Good point, r27. The fact that I have the requested sum in my bank account (and why the hell is my apparently very nosy and snoopy theoretical "friend" so sure of this, anyway?) does not necessarily mean that I don't need the money for myself, or for some person or purpose other than the friend who wants a loan.

Why do I suspect that OP is trying to manipulate a friend into lending/giving him money, and looking for ways to justify his outrage if the friend denies him?

by Anonymousreply 2801/07/2013

I lend money and I must be a soft touch because people ask me for money, like there's this mail room guy at work will stop by. Can you lend me a hundred till payday? He always pay me back but I'm starting to think I should charge interest.

I have given money to friends in dire circumstances and I do consider it a gift because I don't think I'll ever see it again. And I don't.

I agree you should not give anyone more than you can personally afford, like from your checking account. Unless your sister has been accused of murder or something.

by Anonymousreply 2901/07/2013

[quote]Why do I suspect that OP is trying to manipulate a friend into lending/giving him money, and looking for ways to justify his outrage if the friend denies him?

I had the same thought. And r23 I don't know anyone, not even the most remote friend of friend of friend, who's ever been "held hostage." The only reasons I can imagine this ever happening would be if they came from an extremely wealthy family in which case their family would be in a far better position to help than I or because they screwed over a mobster, drug dealer or whatever in which case they'd certainly screw me over just as fast.

My "best friend" would never put me in that situation.

by Anonymousreply 3001/07/2013

Op here, a friend is trying to ask me for money. If I was really trying justify manipulating a friend, then why would I ask the question "how would you respond". I'm not about to describe the exact situation but it is very much like my friend is being held hostage.

by Anonymousreply 3101/07/2013

If a true friend is in trouble, you don't lend. You give. And if that person is a true friend, he will return what you gave. I know of no other way.

by Anonymousreply 3201/07/2013

"Unless your sister has been accused of murder or something."

If it was MY sister, I would totally believe her guilt, and wouldn't part with any amount of money to post her bail.

by Anonymousreply 3301/07/2013

p.s.: You never give what you can't afford to lose, or more than someone needs.

by Anonymousreply 3401/07/2013

If I have the extra cash, I'll just give it to them. I don't expect to be paid back.

by Anonymousreply 3501/07/2013

So OP, here's another way to look at it. I'll preface with a story.

I had a bf for 5 yrs. He loaned me around $1500 as venture capital early in the relationship, at a time when I had no prospects for repayment (I was unemployed and broke). I used this to take a trip (with hopes of gaining something). When I returned, I got a job with the intention of repayment. It took me three months to repay him, with the extra above my living expenses.

Over time, he and I were there for each other financially, and we both always repaid each other. He gave tremendously to me, primarily in emotional and physical support, but a little bit in ways that would cost him much later (like I put a ton of miles on his car that he still has to this day and can't afford to maintain). When we parted and he'd blown through all his stocks, he fell on hard times with no job prospects (had been unemployed for years - doesn't bode well for getting a new job). I loaned him $500-600. I eventually told him, even though he got back on his feet, "Don't repay me. The things you've given me over the years have really helped when I needed it. And I feel like there is balance between us, like the slate is clean, with you never paying me." Sometimes, it just feels right to help someone out. That's when you should go for it.

So, OP, now look at your friend held hostage. In terms of the $ he wants, how does it feel to give it freely? Do you feel a peace about it? Or do you feel nervous about wanting the money back and not certain he'll give it to you? Maybe, if it feels right, just give it to him. But if you have misgivings that you can't seem to get past, trust your gut and don't loan him anything. Give him a token amount you can afford, as was mentioned by R26. You really need to feel clean and clear about whatever you do or don't give, so there's no residue of feelings left over.

by Anonymousreply 3601/07/2013

I'm with the consensus: I'll give but I won't loan. And I won't give more than I can afford to lose. I'm much happier that way and so are my friends. Fortunately, the situation doesn't occur often.

by Anonymousreply 3701/07/2013

[quote]If I was really trying justify manipulating a friend, then why would I ask the question "how would you respond".

You give the impression of someone trying to manipulate a friend, OP, because you seem to be working very hard to invent a hypothetical situation in which the potential lender absolutely feels obligated to make the loan. Makes me think you're trying to figure out just what you need to say and do--how you need to frame your financial situation—to convince a well-heeled friend that *he* absolutely must lend money to you, and you are justified in expecting the loan.

If, indeed, you are in the reverse situation, and someone is asking *you* for money, take the advice of the posters on this thread: lend the money only if you can live comfortably without it, and won't be upset or financially fucked if you never get it back.

If making the loan is a problem for whatever reason--you can't afford it, or you know you'll resent it--then don't do it. Tell your friend you're sorry, but you're not comfortable lending him the money, and leave it that. It's your money and your own damned business what you do and don't do with it--your friend is not entitled to a detailed explanation as to why you can't/ won't lend him some. If he decides to stop speaking to you over this, then he wasn't really a friend after all.

by Anonymousreply 3801/07/2013
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