Why you shouldn’t loan people money

okaygrace By okaygrace, 9th Dec 2011 | Follow this author | RSS Feed
Posted in Wikinut>Money>Loans

Reasons why you shouldn't loan people money and ways to do so if you insist on going through with it

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Have you ever had a close friend or family member come to you with a story about how they are stuck in a bind and are temporarily short on money and would like to get a loan from you that they will “pay back as soon as possible?” It seems to me that this is an issue that most people have had to deal with at some time or another in their life, and Lord knows I have had this issue many times.

Everything I have ever heard or read always says that you should never loan money to friends and family and 9 times out of 10 I unfortunately have learned that that is definitely the truth.

Every single time that I have ever loaned money to someone I have either not gotten the money back or it became a huge burden to constantly have to bug the person to try and get my money back. The one positive out of this though is that the way I see it is that if a friend or family member borrows money from you and then doesn’t pay you back, you can count that as money well spent to discover that that person is not a true friend and can remove them from your life.

For example, currently I am in a very annoying situation where I have a friend that did me a huge favor a few years back and loaned me money to help start a business, which I did pay back to him with interest. He found himself in a similar situation recently and asked me if I would loan him money for 1-2 months, which I did only because he had previously done the same for me. After he received the money, I never heard a word from him for months until I finally contacted him to inquire about the money. It has now been almost 6 months and I have had to deal with nothing but excuses and now he won’t even answer the phone so I am probably going to resort to suing him if something doesn’t happen soon.

In this kind of situation, it is not the money getting repaid that bothers me, it is the fact that a true friend would have stayed in touch with me on a regular basis to try and work things out. Instead he ignored me and I now feel like he was trying to take advantage of me and I have completely written him out of my life, which to me is worth the money I might lose as I don’t need fake people in my life.

Bottom line, I don’t think you should loan money to friends or family or vice-versa unless it is an extremely dire situation. If you do indeed borrow money though and find yourself unable to pay the person back as quickly as you originally agreed, it goes a long way to stay in touch and be honest with that person and even if you can only give them $1 a day, you should. By doing this, you make the other person feel like you are doing your best and once the money is repaid you will probably have an even stronger bond than you did before the loan was ever given.

Tags

Breach, Contract, Friend, Loan, Money

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author avatar okaygrace
I enjoy many things including making money online, playing poker, listening to music, etc.

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author avatar ittech
28th Jan 2012 (#)

Sounds great.

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