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How do I loan money safely to a friend in need?
Friendship / 4:11 PM - Friday September 04, 2009

How do I loan money safely to a friend in need?

My friend wrote some bad checks two years ago when times were really rough for her. She is currently in school to be an EMT. Unfortunately she will not be able to get a job after school if any of these checks go to court. I know that not being able to get this job because of past mistakes will crush her. She has been trying to get back on her feet and these checks may keep for from pursuing her dreams. She needs $1300 that I can afford to loan her. My main question would be what should I do to prove that this is a loan vs. a gift if I have to take her to court.

- Asked by Female, 29-35

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she'll never pay it back. make it a gift and forget about it.

- Response by llafsroh, An Intellectual Guy, Male, 46-55, Boston, Science / Engineering

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Community Rating: Community Star

Take commercial law in college or hire an attorney.

- Response by joeblow1234, A Creative, Male, 46-55, Whitehorse, Artist / Musician / Writer

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I dont loan money that I cant afford to live without. If I get it back it then a nice surprize.But in court you would need a promsary note signed and dated by both of you.

- Response by brezzyblue, A Life of the Party, Female, 46-55, Other Profession

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Have her sign a loan agreement.

A word to the wise...loaning money to friends or family, may cost your relationship.

It is always better to "gift" in these cases, or at least be "ok" if the loan isn't repaid promptly or at all.

- Response by mamom04, A Sweet Sarah, Female, 56-65, Phoenix

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its as simply as an 'IOU' and a deadline date. Keep in mind, don't ever loan money with the intention of getting it back. Give your friend the amount of money you can afford to live without.

- Response by donnapark62, A Player, Female, 36-45, Who Cares?

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You cannot loan money safely to a friend.

It is not your problem she has been financially irresponsible in the past.

She should sell $1300 of her stuff to pay off her bounced checks.

- Response by A Thinker, Female, 46-55, Managerial

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Woah..... DejaVous..... ;~O


Simple... don't give cash. Write her a check with "temporary loan" written clearly on it. Also unless you keep detailed records, make her repay you the same way. Cash is disputable as to amounts even if you write receipts.

Write it up as a promissory note and both of you sign/date it.
Spell out details of amount of loan/payment, interest [if any], term of repayment and she pays for collection/court cost should you have to take her to court. Also, realize that when you loan money to a friend, it WILL come between you.


- Response by singledad281, An Intellectual Guy, Male, 46-55, Houston, Hospitality

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If you insist on doing this -- do not give her the money directly. Find out exactly how much she owes to whom for each of the bounced checks. Pay off the debts directly to the debtors AFTER she has negotiated a promissory note with you. The promissory note should be executed by a financial institution and notarized. The promissory note will detail the amount borrowed, repayment terms, interest, payment due dates and amounts, and collection and court fees. Which you will end up needing because there is not way in hell she will ever repay you.

- Response by utahmom, A Thinker, Female, 46-55, Managerial

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If she is a friend and u have it just give it to her as a lot of friendships are ruined over money

- Response by bigcurt, A Mr. Nice Guy, Male, 46-55, Pittsburgh, Self-Employed

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I've lost so many friends and family over loans. I never loan moneynow. You can do all the above as in a promissary note,

stipulating the amount and day of month due. dont be surprised if she gets offended if you ask her to sign. I had one to tell me, my word id gold and youre not a bank!! yep, she defaulted and dropped me.

If her car has a clear title, hold on to title with a note attached, that if she deafults she is assigning you all her interest in car and an agent [you] to sign her name off title.

if you just have to have her as a friend, dont give her the money, the bad checks proves she doesnt keep her word[ for she will drop you when she doesnt repay. So, just givve it to her as a gift for completing her studies as an EMT. which is hard to find a job, as there is a glut of EMT's at this time.

- Response by A Thinker, Female, Who Cares?, Chicago

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Just write up a contract showing that it is indeed a loan and have this person sign it. You may want to even include pay back terms setting a date that it has to be paid by or that it will be paid in payments of a hundred dollars a month. If you want interest to be paid as well, include that in the contract. It doesn't have to be anything fancy, just put in the details. Cantracts written on napkins have even held up in court.

- Response by thebearsden, A Mr. Married Guy, Male, 46-55, Transportation

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I think that's a nice thing to do, but it seems like you are taking this all on yourself. Perhaps she has a couple of friends that would be willing to split the burden (if you had 20 people that would only be $130 a person)? Or maybe she could get a part-time job or sell some things on ebay or have a bake sale?

I guess you could lend her the money, but lending money to a friend is never easy (especially if it's a lot of money) and usually gets complicated.

- Response by A Player, Female, 26-28, Who Cares?

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You can ONLY afford to "loan" someone money, if you you can afford to have it go without being repaid.

The best way to make a loan, is to take your money, wrap it up nice and neat with a bow on top, give it a neat little kiss "good bye" and hand it over. The less you expect to be repaid, then the more surprised and grateful you will be to be repaid, and the less disappointed you will be to not be repaid.

Oh yeah ... and NEVER bring it up around her again, or you will officially ruin your friendship.


Several years ago, I lent $600 for car repairs to a friend who had a better job than I did. She promised to begin repaying me from her next month's bonus check. She bounced her first check to me ($75.00), and "un-friended" me about a month later when I told her I would only accept "cashier's checks" from her...

She got married and moved out of state within the year, and I've not seen her (or my money) since.

- Response by cd92835, A Career Man, Male, 36-45

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Everyone has a lot of great ideas, and I have another to add. If she has a car, you can get the title from her till your paid off or go to the DMV and put a lien against her car so if your not paid, you can take the car as payment....(just a thought)

- Response by twobinspired4u, A Cool Mom, Female, 36-45, Who Cares?

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You can either not lend her the money, because it may ruin your friendship. Or lend her the money and let her know its a loan that she can pay back when she can gets back on her feet.

- Response by jaws, A Thinker, Female, 46-55, Sacramento, Who Cares?

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When I was 22 I used to lend a roommate small amount of money, but she left and never call back!! I found that she borrowed from all friends small amounts and never return them.

I rarely borrow or lend but in the few times I do we write each others checks.

- Response by A Thinker, Female, 36-45, Other Profession

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People that write bad checks steal...and sounds like she is preparing to steal from you but she gave you a sob story song and dance before she asked for the money...would you really want to give a person that wrote bad checks a check with your account number on it???

You already know how this is going to end so proceed at your own risk....the lesson here is yes a criminal past will typically have some negative affect on your future and a loan is not going to change that....this time or the next time or the time after that.

- Response by clip22, A Career Woman, Female, 36-45, Executive

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Easy. Just hand it to me.

- Response by joeblow1234, A Creative, Male, 46-55, Whitehorse, Artist / Musician / Writer

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If you're going to take some of your money and put it in your friend's hands, you'll do it one of two ways:
- As a gift, never expecting to see the money again,
- Or as a fool.
Either way, you'll never be repaid.

If your friend needs money, there are essentially an infinite number of lending institutions who will provide her with that service. If you do it, kiss it goodbye. Trust me, I've been around this block. I lent a good and reliable friend $140 over two years ago. In the intervening time that person has grossed more than $100,000. I've asked for repayment without interest at leas a half-dozen times, and haven't seen a penny. I never will.

Simply put, the outcome is entirely predictable and is therefore eminently avoidable. Don't do it.

- Response by 2wheels, A Creative, Male, 56-65, Civil Service

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