1) If you are going to be financially impacted in any way by not having the loan repaid you should't "loan" (gift) it. Like gambling don't do it if you can't afford to lose it.
2) Assuming #1, the overall psychological stress and potential impact on the relationship just isn't worth it. As the "lender" you should feel good about helping someone while learning something about them in the process.
Personally, in having this outlook with family and friends they essentially get one shot. If all parties agree it's a loan and the debtor doesn't pay back the funds I move on without impact to the friendship but mentally they have a "strike" in my mind that essentially says "they can still be a good person and friend, but money can never enter the relationship again".
I feel like it's a decent balance.
An additional mechanic is that you tell them that you are not going to remind them to pay you back, that it is not your job to nag them.
It's on the borrower to worry about paying me back. Me, I don't care.
So do you actually mean this, or are you just signaling how kind you are?
I've picked that up from friends I made in Taiwan. It was mostly paying each other's lunch but there's no reason why it shouldn't work in other areas of life.
A non-friend? Sure, that might be different.
Anyone can be forgiven of anything, if you are so inclined. No "signalling" required.
You have to go into the "loan" with the mindset that you will work to maintain the friendship if it doesn't work out.
In short, it's a grant, not a loan. You will become this person's benefactor, and you may learn a lot about how their mind/life works. Perhaps more than you want.
Have lent to many friends/family members over the years telling them to pay me back whatever/whenever they can, however they want. Some have taken decades. No one has not paid back. Few have needed a nudge, which I only give after they have climbed out of whatever hole. Honest people will always make an effort to repay their debts. The rest make lousy friends anyway.
now this is a SMALL amount compared to most people but I have friends who have had a really rough time financially.
If it does it says more about you than the friend
But knowing yourself enough to know you can trust yourself to do this is not easy.
Sure, there should be some consequences for not paying it back, but incessant mockery and refusal to pay for McDonald's is probably a fair exchange.
"Give people lots of leeway, but only once" has worked out well so far. People can't fool you into making a big mistake twice, and once is just the cost of doing business^W^Wfriendship.
On the other hand, finding friends past age 30 is hard enough that paying random devs random sums of money isn't that bad of a deal.
I agree with the parent - don't give it with the expectation of receiving it back. Save everyone the heartache.
$7,000 / 24 = $300 (roughly an extra car payment)Which is bogus in my opinion - this is all discussion on why it's bogus. It's not a comment on the original post by alach11.
We helped my sister in law afford a down payment on a house. She still hasn't gotten a house after 6 months. Am I a bit miffed? Sure. But breaking off a friendship over a down payment seems absurd.
Life happens, and people tend to take a little while to figure it out. Who cares, it's not like we can take the money with us when we go to the next life anyway.
Unless they're a sociopath, borrowing significant amounts of money from friends is usually considered to be a last resort, they're already in a bad place. Adding another monthly payment to their budget going to put them in a worse place.
It also depends on how easily money comes to the lender.
This is easy to say if you're a software engineer at a top tier company making a solid six-figure salary, but $7k is an enormous amount of money for the vast majority of people. I think I would significantly hurt my relationships if I failed to pay back $7k to any of my friends.
If you promised to payback $1 that I lent you, and you don’t despite having it, I’ll equally judge you as if it were $1 million dollars.
Is a big lie to exploit a friendship enough to in the friendship?