Loaning family money

[Nelson Muntz]

Have you ever and if you did how was your outcome?

[Still standing]

  :-\....yea

[Mara Lynd]

Yeah and it's generally a really bad idea. It might work for some, but unfortunately for me, those who want to borrow money have absolutely no way of paying it back.

[Whoo]

Whether friend or family, the person loaning the money needs to look at a couple of things:

1.  A person's ability to repay;
2.  What the circumstances are surrounding the need for a loan, and whether the borrower has done all they can to lessen the amount needed; and,
3.  Whether or not the borrower is willing to sit down and write out a specific, binding promissory note, inclusive of pay schedule and terms of default.

I was approached by a friend of mine many years back about purchasing an extra vehicle I owned.  I agreed, and we wrote out a contract for the purchase of the vehicle, payable at $100 a month.  At about the 5th month, the engine blew because he didn't ever check the oil.  He still paid the car note off, and I was later willing to help out with a supplemental loan to get him back on the road again.  Yep, another contract was written.  I also wrote a letter of credit for him, verifying he paid off those two loans timely and in full, and he was actually able to obtain independent/business financing to start building a credit history and score (he'd always paid cash for things and had virtually no history).  If the person is responsible, it is okay, but alot of people don't consider a person's spending habits and fiscal history when making a loan.  They just want the whining to stop. ::) ;D  ALWAYS get it in writing; in a court of law, if it's not in writing, it doesn't exist!