Loans between friends: wise or unwise?

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Last year, a childhood friend of mine was in a financial bind.  He was running low on cash, between jobs, and on the verge of eviction.  I offered to loan him rent money.  He agreed and vowed to pay me back within a couple months.  Well, here it is one year later and now I need the money paid back.  There have been a lot of hit and miss repayment attempts and missed phone calls and meetings.   I even have another mutual friend trying to help collect the loan since I live in another state.  This has become a fiasco!

Recently, another childhood friend got involved because he saw my distress. He and borrower exchanged some unkind words.  Feelings were hurt and accusations made.   Now, the loan has turned into a dramatic scene and I’m caught in the middle.  I just wanted to help a friend in need and be paid back in a timely manner.  I pray this ends today with the loan repayment, but will the hurt feelings and anger be as easily resolved?  I asked myself after this experience, is it wise to loan money to friends?

What do you think?

 

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One thought on “Loans between friends: wise or unwise?

  1. My dad always asked me to, not to involve money among friends. I didn’t know, why he say that, until I had couple of such experiences. You know, it’s actually a problem with people like us, who find it difficult to say NO. I helped a friend pay his bill through my credit card, he promised to return next month. And the amount was large, like my 3 months salary. It took me 1 year to resolve the matter, when my credit card bank, started to get nasty on me, to make the payment, while the credit amount has increased 50%. It was an extreme distress, he has put me into, but the guy was in worse financial mess and couldn’t pay the loan, let alone the accrued amount. So, naturally, he at last stopped picking up my calls. I had to settle the money and bear being blacklisted by the bank for non-payment. So, this is a lesson learned very hard way. But I have forgiven him for the money, because if I don’t, I know the punishment (in the hereafter), if someone takes money and not return and die in that situation.

    Some say, help people with as much money, that you can afford to live without (if he/she doesn’t return it). I still give poor people money (small amounts), when they borrow it, they smartly think I would forget, but I give them (without expecting them to return). So, it’s our good deeds and intentions that counts, but we shall not do something that will make us suffer. Btw, this blog has given me inspiration to write full post on it 🙂

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