Lending money to acquaintances and friends
Because debt does not care for you, debt does not come from one body with you, and with debt you do not share childhood memories, it can be concluded that debt is not a brother and debt is no good. When deciding to lend money to acquaintances and friends, there are a few things to keep in mind.
Are people ready to lend to their friends?
A survey by quick lender Ferratum shows that 58% of people lend money a few times a year. So a large part of the Latvian population (perhaps one who takes out quick loans) lends money to someone every few months. One in two respondents said they would lend a small amount of money to friends or relatives and only 13% would be willing to lend more. With regard to the sums of money, about 40% would be willing to lend from 10 to a few tens of lats (thus amounts starting from 15 euros). Around one in four would lend around EUR 140 and one in four would lend more than EUR 140. Most people lend to friends and relatives, whereas only 8% of people would lend to their colleagues.
When to lend to a friend?
“Forgive your debtors” is a straightforward Bible statement, but it could be a good guideline when it comes to lending money to your friends. That is – it is worth lending if you are sure that, even if the money is not returned, it will not damage your relationship and it will not break your budget.
So it’s pretty safe to say that, with exceptions, of course, it’s worth letting only small amounts you don’t even want to get back. When lending larger amounts, it may be worth concluding a loan agreement, which can be done by going to a notary public with a deed of agreement. In this case, you will not only be eligible to claim your money back, but can also be written off as a capital loss, some of which can be recovered for tax purposes.
What if someone does not pay the debt?
The first would be to not exaggerate and “don’t give in to the dumb”, because then your friend may think that he no longer wants to be your friend, even if he was about to give back money. If it is a small amount of money, then it is definitely not worth exaggerating – if the borrower is really your friend and not return the money, he or she may have forgotten about the money, and a few reminders can turn a bad money back into you.
If, however, it seems that the debtor does not care about your money, you have to hope that you have a contract because there is no way to legally force the return of the unsecured money. In this case, it is worth just acting on your conscience – if you are angry, let your friend know about it, and if he does not return the money, social pressure tends to work wonders – tell your mutual friends about asking for money back.