Always get a written contract if you loan someone money, even family members.

So I know I'm a fool, but my brother-in-law needed major car repairs and the shop would not release his vehicle until he paid them. He borrowed $3,000 from us, telling us he would repay us $300 a month. We put it on our credit line since we didn't have the cash. He knew we were putting it on credit and didn't offer to pay the interest we would be paying each month, but I thought it wasn't a big deal since we would be paid back within 10 months.

It has now been 13 months and he has paid us a total of $700. He has a higher monthly income than my husband and I combined(!) and he knows we are still paying interest on his debt and has still not offered to pay it. He also refuses to get credit counselling although he is deeply in debt and paying over $400 a month just in interest on his own cards and credit line. Nice that he is prioritizing making payments to big companies over his own family.

I believe he will eventually pay us but I have learned my lesson and will never lend anyone money again without a written contract with terms of repayment -- and will follow up in court if it isn't paid. I have borrowed myself from family and friends, and always paid it back in a timely manner so I guess I expected good karma.

To be fair to myself, I haven't often had the funds to lend anyone money, so I've never encountered this situation before.

Just a warning to everyone. I know times are tough and people are suffering. So you have to protect yourself. I've read many stories here on SF from people who loaned money to family and didn't get it back.

Sorry you're dealing with this Lady W. I hope you get what is owed to you sooner rather than later!

I agree 100% with you re: loaning money to family members.

To this I would add: NEVER cosign for a loan for a family member either!

Sorry this happened @Lady Wolfshead . I'd send him a a bill every month and start compounding the interest too. Ugh! what a disrespectful thing on his part to do to anyone, let alone to one's family.

I tell them straightforward: "I don't do loans. Either I'll give you the money outright or not at all. So, ask me for the amount you need, we'll get this issue over with right now, because I don't do loans."

Because it's almost always the same, when a person gets their needs met, they forget that they promised to make it right. That reminds me I am so glad I didn't fall for a certain person's request to help pay for his brand new car.

Just a few random thoughts re lending money to others based on personal experiences or those who I've known that have lent in the past :

Before lending anyone any money, ask yourself at least this one question. Are you prepared to write off the whole amount as a bad debt? If by doing so will create a negative impact upon yourself, then perhaps refuse to do so. Consider both the emotional as well as financial impact this may have upon yourself.

Bear in mind, there can be a difference in definitions in the term "loan/lend" between the lender and loanee. The lender will expect the money to be returned over a reasonable amount of time. The loanee however, can confuse the term loan wirh handout where repayments are not on the menu or at best at their own discretion. Naturally of course, between family and friends such a thing can so easily upset the relationship dynamics from one of amicability to one of animosity as the lender resents the other for not paying them back, and the loanee resents the the lendor for being regularly reminded of their debts and the requests for payment.

Contracts though technically a good thing, perhaps just stop to consider the loanee's reaction of being handed a contract from a friend or family member who has agreed lend them some cash.

I remember someone once saying, avoid lending to friends or family as money is a grand way to jeopardise an existing good relationship.