Proof of Loan

Adolin · 01-10-2020 09:50AM #1

Hi All,

A friend has recently asked me for a loan. Although I wouldn't normally have an issue with loaning them money, this is quite a lot at 5000 euro. If I send that money to their bank account, is there anyway they could then claim that they didn't receive it?

I know it'll show up on my bank account online but when I look at my online account for money that I sent to other people, there's no information on that other person's bank details, rather just a brief reference that I can put in. Should I type up some sort of loan agreement form & ask them to sign it?

Hannibal_Smith · 01-10-2020 10:20AM

If you're worried your friend might claim they never received the transfer, I wouldn't lend them a cent tbh.

If you're going to go a head with it, absolutely have an agreement in place for the most important part - the manner of repayment.

Flippyfloppy · 01-10-2020 10:22AM

Not much of a 'friend' if you think there's the slightest possibility that would pretend they never received the money. Sounds like you shouldn't trust them with your lighter, let alone with 5,000 euro of your money.

HildaOgdenx · 01-10-2020 10:41AM

There's an expression about only lending money you can afford to lose. Don't do it would be my advice.

If you do go ahead, yes, absolutely, make sure you have a proper written agreement about repayment, in place.

Xterminator · 01-10-2020 11:42AM

HI Op

an email to your friend with a reply from her agreeing to the repayment schedule and an agreement the money is transferred electronically not via a cash handover and that repayment be made electronically or that a book is kept and signed and updated each time a payment is made. that will protect you both, and prevent and misunderstandings.

But many a friendship and family relationship is lost or fractured by lending money. Make sure you have thought through the whole thing and understand you could lose more than the principal sum involved.

cannotlogin · 01-10-2020 12:03PM

What do they need it for?
What can't they get a loan?
Would they lend it to you?
Can you afford to never get it back?

I would only lend money I can afford to lose & consider it gone the minute I hand it over.

If you intend to go ahead, make sure you have a solid written agreement of how much, how long for and how to will be repaid, i.e. don't put something like when they start working again, they might never etc. It has to be specific & very clear, I.e. repaid at €100 per month by way of lodgement to a/c x commencing on November 1st etc, a paragraph 're non payment etc

I would advice against it given your concerns.

Tork · 01-10-2020 12:39PM

I'm sure you're familiar with the phrase "Neither a borrower nor a lender be". Of course I don't know you or your friend but this reads like a recipe for disaster.

Has your friend explained why they need so much money? Most people in need of €5,000 go to the credit union or get a bank loan. Why are they unwilling or unable to go this route? If this person has trouble managing their money or existing debts, pointing them in the direction of MABS would be a better solution.
If they've run up this debt through an addiction - drugs, gambling - you'll be doing them more harm than good by enabling them. It also goes without saying that you're not going to be seeing your money paid in full and you'll probably fall out with them.

In short, you're most likely making a foolish mistake by loaning somebody such a large amount of money. If I was in your shoes, I'd be inventing some sort of costly car or house repairs and backing out of this agreement.

Sky King · 01-10-2020 12:42PM

Strongly suggest that you don't lend the money, for many reasons outlined above by others.

The only way I would even consider this is if I was given something of greater or equal value as collateral.

Del2005 · 01-10-2020 12:49PM

Regardless of what agreement you come to you need to be aware that getting money from a debtor in this country is nearly impossible if they don't want to pay.

So if you don't trust them that they will confirm that they received the money, a simple way would be to transfer €5 with a code that they need to send you back as you want to verify their IBAN before you send €5k!, do you trust them to repay the debt when large corporations with in house legal departments regularly write off similar sized debts.

Adolin · 01-10-2020 02:51PM

Thanks to all for the helpful points. Now that I've thought about it, I did lend them money a couple of years ago but they never paid me back. It wasn't much, around €60, but still it was never mentioned again.

At the very least I'll insist that we agree to something that is indisputable should I decide to loan them the money. Then should it ever arise that they won't pay it back they can't say that they didn't get it. If there's any hesitation in what I'll demand then I'll know not to go ahead with it.

Seth Brundle · 01-10-2020 03:03PM

Adolin wrote: »

Thanks to all for the helpful points. Now that I've thought about it, I did lend them money a couple of years ago but they never paid me back. It wasn't much, around €60, but still it was never mentioned again.

At the very least I'll insist that we agree to something that is indisputable should I decide to loan them the money. Then should it ever arise that they won't pay it back they can't say that they didn't get it. If there's any hesitation in what I'll demand then I'll know not to go ahead with it.

If you previously loaned them money then they'll remember it and remember getting away without paying you back - which should tell you something about them.
If they don't remember then this too should tell you something.
Anyhow, I wouldn't give them anything because I know, given what you've told us, I would never see it again.

Plus, having a contract saying that you loaned them money is of no use because If they claim that they don't have it to pay you back, what will you do? Will you spend good money after bad trying to get it back?

Tork · 01-10-2020 03:15PM

If they couldn't pay you back a mere €60, what makes you think they'll manage €5,000? I see this as a warning sign about how trustworthy they are. Just for comparison: the only time I've ever been loaned money by a friend was the time I lost my wallet and bank cards and was short of cash for the weekend. I made it my business to repay them as soon as possible. A loan from a friend isn't something a person "forgets" and I doubt this person has forgotten either. What they will have noticed is that you didn't chase them up over this money.

Can you confirm if
1. You know what this money is for?
2. Why this friend is looking for such a large amount of money off you, rather than going to a financial institution. My feeling is that they've got a dodgy credit record and can't borrow a penny. It goes without saying that if they're not capable of saving money or repaying existing loans, why will they be any different with you?

I hate to say it but I have a suspicion this person see you as gullible and a soft touch. Are they even a friend? I think most of us wouldn't dream of asking our friends for such a large sum of money. Are you afraid of saying no to them?

Hannibal_Smith · 01-10-2020 03:18PM

Adolin wrote: »

At the very least I'll insist that we agree to something that is indisputable should I decide to loan them the money. Then should it ever arise that they won't pay it back they can't say that they didn't get it.

If he couldn't manage to repay €60, how is he going to repay €5,000? Admitting he got it or not is only the tip of the iceberg. If he admits he has it but can't or won't pay you back, what then?

Listen to your doubts on this one.

Victor · 01-10-2020 04:06PM

Is the a risk that your friend has drug or gambling debts and there is no prospect of repayment?

valoren · 01-10-2020 04:15PM

Do not lend them any money. If they can't get sonething like an unsecured loan from the Credit Union or a personal loan from their bank then it's a serious red flag about their capacity to repay. €5,000 is a significant sum to anyone and a recipe for a falling out between you both which would be convenient for your friend as they'll likely fob you off considering they've stung you previously albeit for a much smaller sum. Fool me once shame on you...

If they try to guilt trip you just say you're not in a position to give personal loans currently. If they are truly a friend then they will accept that. If you absolutely must give them the cash then I'd get a solicitor involved to prepare a loan agreement. If your friend protests about that then it's another red flag.

cannotlogin · 01-10-2020 05:11PM

Let's call a spade a spade here.

He wants to €5k & didn't even pay €60 back in the past.

Chances of you being repaid are very slim and every if all your documents are in order,you can't get blood out of a stone.

Banks and building societies, with all of their paperwork, legal teams etc have difficulty recovering money so of they struugle, you'll really stuggle. Furthermore they obviously don't consider him a good risk or he would have got a loan already.

There's no loan here. He's asking for 5k. Are you prepared to lose it? If not, you would be mad to give him the money.

Tork · 01-10-2020 05:58PM

You're going to end up falling out with this friend whether you loan them the money or not. So which would you prefer? A falling out with the money still in your bank account or one without. I know which one I'd choose.

waxmelts2000 · 01-10-2020 08:21PM

Please do not do it, I loaned money to my " boyfriend of 4 years".. my now ex still owes me E1600 after promising he would return the full amount. 3 years on still waiting

Airyfairy12 · 01-10-2020 11:26PM

If you're already having doubts about your friend and wondering if they will blatantly lie and say they didn't receive the money as a way of getting out of paying you back, you are absolutely mad handing over that kind of money to someone you already feel like you cant trust.
If they claim they didn't receive it, what do you plan to do? Bring them to court? contact the bank? .. sounds like youre setting yourself up for stress and drama, even if they do pay it back its going to be on your mind from the minute you give them the money.

dixiefly · 01-10-2020 11:29PM

I think that you can count that original 60eur as some of the best money that you ever spent as it tells you this persons attitude to paying you back.

I think you would be mad to lend it and I reckon that this person must have some type of influence over you for you to be considering it after them not paying back before and you thinking that there is even the remotest chance that they may deny receiving it.

TheW1zard · 01-10-2020 11:30PM

Say no

bobbyy gee · 02-10-2020 01:16AM

Lose the money and the friend

endacl · 02-10-2020 01:31AM

Adolin wrote: »

Thanks to all for the helpful points. Now that I've thought about it, I did lend them money a couple of years ago but they never paid me back. It wasn't much, around €60, but still it was never mentioned again.

Ask them for the €60 back first, as a mark of good faith.

Then don't loan them anything ever again.

amdublin · 02-10-2020 02:16AM

Please don't lend your friend money.

You are going to lose $5000. No two ways about it.

Why can they not go to the credit union? Oh, probably because the CU would say, no, this person is not going to pay us back.

Please don't give this money. You cannot get blood from a stone. No amount of agreements or evidence that you gave them the money is going to protect you and get that money back.

Tork · 02-10-2020 10:13AM

dixiefly wrote: »

I think you would be mad to lend it and I reckon that this person must have some type of influence over you for you to be considering it after them not paying back before and you thinking that there is even the remotest chance that they may deny receiving it.

OP you don't have to answer us but this is at the heart of the issue. What's the real reason you're thinking of giving this person a loan? You don't have to answer that question here but it's curious that you're even considering it despite your uneasiness.

Zebrag · 02-10-2020 10:25AM

If you have to think twice about loaning someone money, then you shouldn't loan anyone money.

If you've to worry about gathering proof that they have recieved loan to pay you back, then you shouldn't loan money.

If you've to make a set contract or agreement and worried or don't trust they will fully pay you back, you shouldn't loan money.

As kind, lovely and trusting as you sound OP, please do not put that pressure on yourself to loan anyone money, even if you feel you have to ask advice to order to gather proof they have recieved set funds and you want proof they can pay you back.

As much as your friend seems willing to pay you back, more often or not you will find yourself in a situation where you will either wounder if friend is going to pay you back this month (whatever payment plan you have set up), you'll be woundering why friend hasn't paid you, or (I hope this never happens!) friend all of a sudden does a disappearing act and you're down 5,000.

You do not want to be in a situation where you have to ask your friend where such and such amount is if they failed to pay. It's horrible for you to do.

If you've already transfered said funds then if you really want proof they have recieved it, you could ask them to screenshoot their bank account (which they can always say no too) or you can base it on trust and hope to jaysis they won't make a fool out of you.

But please listen to other posters and learn from this, never lend money. It causes more problems than necessary. I will help if needed but I will admit, I never lend money. Its not worth the upset. Its not worth the lost of a friendship.

Edit: OP if you've read this read and changed your mind, you've every right to ask for the money back, after all it's yours bearing in mind, this would be a clear indication of how your friend would react to this shows their commitment to your friendship and really this would show their commitment to paying it back. You shouldn't feel bad for wanting to change your mind and your friend should accept this

Oink · 02-10-2020 10:27AM

Be ready to lose both money and friend.

kylith · 02-10-2020 01:31PM

never, ever, ever lend money that you can't afford to lose, because there's a good chance that you will.

bobbyy gee · 03-10-2020 03:39AM

money lender

https://www.moneyadviceservice.org.uk/en/articles/should-you-borrow-from-family-or-friends

punisher5112 · 03-10-2020 03:43AM

Done exactly this to help a so called friend out, never got it back, even went the legal route after over 4 years and it was pointless.

Just state you don't have it.

Op you are nuts even thinking about it especially after all the good advice here.

ILoveYourVibes · 03-10-2020 03:56AM

I think people are being a bit cynical.

Proof of Loan

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