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You should definitely do this beforehand!Loaning money to friends – is that a good idea?
Helping friends out of trouble financially: yes or no?
Getty Images/Kate Wieser
Friendship ends with money!
This saying probably doesn't exist without reason. But shouldn't you generally help friends who are in trouble? What are the risks of lending them money – and how can we ensure that the friendship doesn't suffer?
Boyfriend or girlfriend asks you for money? You should ask yourself these questions BEFORE
Fee-based consultant Anica Schulz explains in an interview with the German Press Agency: “We project many things onto money and the same applies to debts.” Would I feel taken advantage of if I helped out my friend financially – and then that person just didn't pay the money back? Or would I be uncomfortable reminding them of their debts at some point? “I should definitely ask myself questions like these before lending money to someone privately.” You should therefore only lend an amount whose loss would be financially bearable in an emergency.
Wolfgang Krüger also points out that money is still one of the biggest taboo topics in Germany. “If I lend a friend a book or an umbrella, I have no problem asking if I can have the things back. But when it comes to money, things are completely different,” says the psychotherapist and business economist. In addition, the person may have a completely different relationship with money than you do. Krüger advises you to first ask yourself the following questions: “Does she seem creditworthy to me, what kind of handling does she have with money and does this suit my own attitude towards money?”
Jörn Valldorf, mediator and spokesman for the Federal Association of Mediation, lists the most important factors for the loan: Height, occasion and period. “Personally, it would always be important for me to know exactly what the money is for and when I will see it again.”
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Contracts between friends? Yes, absolutely!
“When friends or family ask you for money, you actually want to be generous because you have an emotional relationship with each other,” says Krüger. But a loan can put a lot of strain on this relationship because it essentially puts a price tag on the friendship.
“But this is mainly due to the fact that lending money is often seen as a service of friendship,” says Anica Schulz. But even between friends, it is more of a business relationship. “To make this clear from the start, you don’t just give yourself the money, but rather, if possible, regulate in writing what amount is involved and by when it will be repaid,” says Schulz. In this way, you can prevent the friendship from being questioned later just because there are business conflicts.
For larger sums, Krüger would go so far as to Interest to be agreed on. “Because if I lent a friend money 20 years ago so that he could buy an apartment, then he has earned money with it today. But if I only get the amount back then, that means a big loss for me.”
Private loan agreement: This has to go in
As the Sparkasse explains, you don't need a lawyer or a notary for a friendship loan. You should write these points in your private loan agreement:
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Names and addresses of the contractual partners
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Date of conclusion of the contract
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Amount of the loan amount
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Date of payout
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Repayment arrangements (e.g. monthly installments)
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if necessary, regulation of an interest rate
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any securities
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Signatures of the contractual partners
What if the money isn't paid back?
The document has been drawn up, the latest date for repayment has been set – and you still don't see any money? Many people are afraid to discuss the resulting conflict with their loved ones. “It is therefore better not to say anything, but it is not a solution because the conflict still exists unspoken,” says Jörn Valldorf. He advises: Clearly separate relational and factual levels. “I shouldn’t appear too demanding or accusatory or personally disappointed, but rather state the facts as neutrally as possible: I loaned you X amount, you didn’t pay it back as agreed.”
According to Anica Schulz, this is important clear “I” messageswhere you also say why you want the money back now and ask the other person why the payment is still outstanding. “Afterwards you can talk about how it feels for each side that the debts are not being paid and then look for a solution together.” It is best to record this solution in writing in a repayment plan. If the debtor then defaults again, there is a clear basis for a new conversation.
If, on the other hand, the doors are closed and there is no willingness to exchange ideas fairly, then fundamental values of friendship such as trust and appreciation of others will also be disregarded, says Wolfgang Krüger.
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Simply forgive debts? Why this can be problematic
If you don't urgently need the money yourself, it makes sense to silently forgive your friend's debts – also out of concern that the conflict could put a strain on the friendship. “If I’m planning a gift like this, I should definitely talk about it openly,” says Jörn Valldorf. If the debt is tacitly forgiven, the other party's worries about repayment will continue to smolder.
“I should also give the debtor the chance to consider whether he even wants to accept the gift”said Valldorf. Because it can also be very stressful if someone always feels they are in debt to a friend. He might then think that he “now owes a favor or eternal friendship,” says Schulz.
Before those affected make such a decision, they should definitely make sure that their own financial stability will not be jeopardized if they cancel the debts, advises fee-based consultant Schulz. (rka)
Sources used: dpa, sparkasse.de
