Is it a good idea to loan money to friends?
In their recent report, the Bank of America sought to analyze the effects that money had on friendships, and they discovered that loaning even small amounts to friends could fuel a lot of stress and future strain in the relationship.
It's being referred to as the first report of its kind, called the Friends Again report, and it details the difficulty that can come along with trying to help a friend when they are in need of a loan.
The report found that roughly 71 percent of Americans have loaned money to their friends and still haven't been repaid for that loan.
For some, it could ultimately contribute to breaking up the friendship indefinitely. Roughly 2 in 5 Americans say that they would end a friendship if that friend didn't pay them back. For many of them, they'd be willing to lose the friend over $500 or less having not been paid back. And many reported that money was one of the main causes of stress in their friendship, with roughly 53 percent having seen a friendship come to an end over a financial dispute.
In relation to the problem, Bank of America has established the Pay Back A Friend Day that is dedicated to promoting the idea that no matter how much time has passed, or how much or little is owed, making payments on those debts to friends can mean more than we know.
For a great deal of people, it can be very awkward for them to try and ask for that money and remind their friend that they still owe them, most people say that they would rather talk to their friends about anything and everything other than money that might be owed to them.
With its BOA mobile app, users can now send, receive, and request funds that are owed to them, even if those they are asking bank at some other institution. And of course this isn't the only method available on the market today for those who are looking to send funds to those they might owe some money to.
Perhaps for those who do loan money to friends, if they start off with the understanding that they might not see those funds again and not give out more than they can afford to lose, then maybe there wouldn't be as much stress placed on the relationship. However, for some they might consider it a cheap lesson (or an expensive one) to learn and find it worth cutting ties with someone who has no intentions of keeping their word in repaying the debt no matter how small it might be.
It might be surprising to some for them to find out that money is such a touchy subject for so many and that it's so uncomfortable for some that they'd rather end a friendship than endure the awkwardness of trying to square up a debt with their friend. Finances have been frequently attributed as being a leading cause of stress in relationships with others.
Pics:
Pixabay
Simpsons via Giphy
Sources:
http://cw39.com/2017/10/17/bank-of-america-takes-over-twitter-with-national-pay-back-a-friend-day/
https://www.forbes.com/sites/sleasca/2017/10/17/pay-back-friends-app/2/#6789eaba45fa
https://www.cnbc.com/2015/02/04/money-is-the-leading-cause-of-stress-in-relationships.html
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I'm the type of person to help others and give them money and not expect to have it back . I gave $2000 to a friend last year to pay off his court fees so he could get a job . I like to help even it others are not willing to do the same
i do the same i give you as a gift not a loan, loaning leads to awkward moments especially when it time to pay back
Very interesting article. I'm dealing with numerous friends who aren't paying me back, one is slowly making the effort, good for him.. The others.. Going on 2+ years now, when I remind them.. It's like I'm the bad guy.. It sucks. Shows me what kind of friends those friends really are.
money has a way of splitting friends and behave as if you are not supposed to ask for it, almost had a fallout with a friend that i decided to forget about it for friendship sake
Great topic, I try not to lend friends money but I do. I've had mixed results. One friend took 3 years to pay me back a couple of hundred while avoiding me like the plague and purchasing new toys for himself along the way.
Other friends paid me back promptly and were very grateful for the help. Always a very tough decision.
If you don’t have any financial problems with money and your friend asks you it’s not a big deal to give and not a big deal if the money isn’t coming back on time or coming back at all.But if you yourself don’t have enough and give it to the friend and this friend is not in a hurry to pay back the debt there will be tension of course, and stress and friendship ruined.
Totally agree with this, great point. I've had a few friendships go sour over money but that's because we were both struggling to keep our heads over water at the time.
i learnt if you give then let it go , dont loan them but gift them and that has been my principle when it comes to friends and money, it save you from a lot of heart aches
Bank of America is a bloodsucker that needs to be killed by crypto.
Yeah, they may be right about loaning money to friends, but even a broken clock is right twice a day.
What a brilliant idea, I know a couple who owe me money from way back, havent got a hope of seeing it again.
I have loaned money in 5 instances and was repaid only twice. Yes loaning money can often destroy a friendship. It is much better to gift the money to your friend. Do not plan on getting paid back as it is a gift. If you do get paid it is icing on the cake. However if it is a real friendship, then that friendship is more important to preserve than the money. If you cannot gift it, don't give it. Even the Bible supports the idea of gifting money rather than loaning it. good read. Thanks for sharing.
I seldom do this, but if i do, i am thinking that the money i loaned to my friend is me just helping him or her, i am not expecting them to return it, of course i dont lens them big amounts.
So if they return it, thats great, if they not, atleast i helped them but they will not be able to borrow from money again.
I am personally against lending money to friends coz it might ruin your friendship
In my opinion.
if you want to lend money to friends, there are 5 things we must think about.
Discuss options other than borrowing money. Money is not always the only solution when it comes to financial difficulties. You can still discuss some other ways to solve financial problems without spending large amounts of money.
Lend some money that you can tolerate if you do not get paid. When lending money to friends or family, let's say you give it. This is because you may not receive it again.
Explain the pattern of payment to your relatives. Make a plan for the debt repayment scheme including the date of repayment. You should also discuss the steps if he does not end up paying the debt.
Black on white. If the loan is large, then make an agreement with it. The agreement may bind him as he avoids paying later on.
Anticipate problems that will arise. Let the borrower do what he has to do.
While you must prepare yourself for any possibilities including losses that can be caused when your friend does not pay the debt.
Do you think successful loans could bring friends closer though? Say they were able to set up a contract, with the knowledge that the deal could, and most likely would, see its completion by a certain date.
Then it was honored. - that'd bring people together, right?
I know I wasn't taught how to draw up a contract in school, but I can see how learning how to do so would provide me a valuable tool for interacting with my community.
Essentially, I believe that a people who can govern themselves, don't need a government.
But until we collectively upgrade our society to truly honor contracts, we need other systems to help hold us accountable (laws, banks, debt collectors).
I'm just wondering how we can bolster community, and propagate trust, so we can transcend the scarcity mindset engrained in our culture.
Never lend money to friends. It gets really difficult when it’s not repaid. Which usually happens. I am still owed loads from different people and when you mention it, they act like you are making a scene. You either have to write off the money, the friendship or both
Small loans to friends have been causing lot of disasters.
It's really had to get back your money especially when it's your friend.
Me if am giving out money to a friend I don't expect it back, but if he does then am always greatfull.
Excellent post. We can get lesson from it.loaning even small amounts of cash to friends could end-up spelling disaster for the friendship in the long-run.
I have many times faced these situations. Cash to Friends it's destroy the FriendShip.
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HUMANS R NOT MACHINES ... N CANT BE ONE EITHER.... we live in a world where emotions are a an essential part of life... we have to give n take in our society... what could be safer is that , give loan and forget...if the person returns it... well n good, if the person doesnt return,... no problem... you always be in his heart....
I don't trust BOA further than I can throw them.
Looks like the made up a fancy story to allow them to be the middle man in inter-personal loans.
People who feel that they should be doing better, often feel ashamed to ask for help. And, this shame usually keeps them down in the dumps for a while. Giving these friends money is important, but asking them for the money back is just adding lemon juice to an open wound.
Then there are the bums. Everyone seems to have someone who will pay you next tuesday for a hamburger today. Asking them for money back is like... well, you should change the question and ask them to tell you a nice sob story.
Then there are the people you want as friends, who remember every dollar you gave them and they often repay.
So, imho, if someone asks me for money, I look at it as a gift, not a loan. And then, I do not build up any resentment towards them.
However, it also weeds out who I am friends with. As, I like to stay honest and aboveboard, and I like my friends the same.
Hmmm.... BOA the "BANK" did a study that suggest that friends shouldn't loan friends money... Well I guess that means I should not give my friends money if they ask... Then I guess that would mean my friends will have to borrow money from a "BANK" instead of me...
Hmm lets see, If my friend can't pay me back, I won't report them to a credit agency, I won't ruin their credit, I won't garnish their check, I won't take them to court, and or have thrown in jail. So the worst thing is I guess I wouldn't hang out with them any more and at best I would forgive them...
Well I would still rather my friends borrow money from me, than to throw them in the hands of a greedy, to big to fail, self serving banker. HI FIENDS ;)
its one of the worst ideas, they say if want to loose friends fast loan them money. i have one principle when it comes to friends and money, i dont loan them, if i give you money its a gift not a loan ,
Do not loan to friend... money can be ugly... and even money can cost a friendship..
wow good post...
I'm a bit skeptical. Wouldn't a bank, who is in the business of loaning money, want to spread the idea that you shouldn't loan money because you are competition? Am I reaching?
Michael Corleone ..: "Friends and money - oil and water" (-Godfather III, F. Ford Coppola)