Lending a significant amount of money to a friend

Help
1

Hi all!

I’m going to lend a significant amount of money to a friend (around 5k). The idea is that she will pay me back little by little every month.

Does anyone know if I need to do anything in particular so I don’t have any issues? Should I contact Monzo in any form or it should be alright?

Thanks!

2

You’ll be fine to be fair, their bank might ask the questions if they don’t usually get £5k in from other people, but otherwise you’re good.

3

sign a contract with your friend …witnessed with the terms and repayments

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4

In addition, Monzo might ask questions to ensure that you aren’t being scammed.

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5

Very true.

6

Don’t lend money to a friend that you’re not prepared to lose with no hard feelings.

People’s circumstances can change.

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7

Both of these for sure, but especially the first one. At the end of the day, your friend is still a debtor of your’s so you need to ensure they don’t take the piss basically. Circumstances do change of course which is why these are both excellent advice pieces.

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8

Good on you, but it is not something I would be willing to do. Money ruins friendships. Be prepared in your head to write it off as a gift. And ask yourself, after you lend it and they miss a payment back to you (which they will at some point - not necessarily deliberatly), will you be getting frustrated when they buy some new shoes/clothes/holiday/whatever? You will judge how they spend the money you lend them and the money they don’t pay back. It is human nature.

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9

I’ve watched too many episodes of Judge Judy to ever loan anyone any money on that level. Couple of hundred quid, sure but never £5k.

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10

Rinder too. I saw one episode where one party was suing* the other for not having paid back a loan yet. Naturally Rinder kept asking if there was a contract. Amazingly, there was! Albeit back of the napkin style affair.

As I recall they still basically lost, though, as the contract didn’t state when the money should be paid back by, nor what penalties there should be for late payment.

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11

Judge Judy / Rinder fan and expert here too :raised_hand: :sweat_smile:

I’ve seen similar when the agreement is ‘I’ll pay you back a bit each month’. Unless you specify a fixed date each month and an amount to pay, they lose their case as the friend is still paying “what they can”.

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