Comments on: Loans Are For Banks

By: The Unknown Professor

The Unknown Professor — Mon, 26 Dec 2005 19:33:45 +0000

Excellent advice (from you and the commenters). I’ve been on both sides of the “families and friends” loans, and they both stink. From now on, I either avoid it like the plague or just make a gift of the money with a suggestion if that if they feel the need to pay it back, just make a contribution to charity.

By: Multiple Mentality

Multiple Mentality — Mon, 26 Dec 2005 14:33:57 +0000

Carnival of the Capitalists for December 26, 2005

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By: Bruce

Bruce — Thu, 22 Dec 2005 13:39:07 +0000

I avoid lending money, even lunch money. If I have a friend with whom I eat lunch regularly, it is easier to simply alternate paying than to “spot him”. However, with family it gets more complex. I do it this way.

1) I have to be able to afford it without pain.
2) They must really appear to need it.
3) I give them the money as a loan, while mentally marking it as a gift.
4) If they pay me back, I may be willing to do it again in the future
5) If not, then they just used their one-time emergency fund from Bruce.

By: FMF

FMF — Wed, 21 Dec 2005 12:46:31 +0000

If we have a family member who needs a small “loan”, we just decide if it’s reasonable and if so, we give them the money as a gift.

By: Neo

Neo — Wed, 21 Dec 2005 08:26:53 +0000

There is another aspect to consider. I have a family member that took a large loan from their inlaws in order to purchase their first home. That was a huge mistake since the inlaws never really let them live it down.

Neo