# How much to ask a friend to repay?



## Corolla97 (5 Dec 2005)

A friend of mine owes me some money. He is now in a position to repay it. The sum has built up over a number of years. The sum is now about 3900 Euro. It has built up approx as follows:
Jun 00 - E350
Dec 00 - E700
Jun 01 - E1900
Oct 01 - E2400
Jun 02 - E2600
Jan 03 - E3500
May 05 - E3900
Am I justified in looking for a bit more back off him to compensate me for the reduced purchasing power of the sum involved in today's terms?
If so how should I calculate it?


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## RainyDay (5 Dec 2005)

At a minimum, he should repay you an equivalent to what you would have got if you had put this money on deposit with the banks (approx 3% per annum). He's still getting a great deal, as bank loan interest rates would have been around 8% to 10% per annum. Of course, it's always good to have got these things agreed up-front to avoid any rancour or haggling later.


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## Gabriel (5 Dec 2005)

Corolla97 said:
			
		

> Am I justified in looking for a bit more back off him to compensate me for the reduced purchasing power of the sum involved in today's terms?
> If so how should I calculate it?



Not really. Depends on whether you want to keep him as a friend or not.
Granted he shouldn't have gotten himself into this situation but you can't be charging the guy interest.


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## Eurofan (5 Dec 2005)

Gabriel said:
			
		

> Not really. Depends on whether you want to keep him as a friend or not.
> Granted he shouldn't have gotten himself into this situation but you can't be charging the guy interest.


I couldn't agree more. Frankly I'm amazed you're considering it. When you agreed to loan him the money did you raise the issue of him paying you interest then?

I dunno whos worse in this 'friendship', him for borrowing so much or you for considering gouging him... Christ some people..... There's more to life than money you know.


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## delgirl (5 Dec 2005)

Gabriel said:
			
		

> Not really. Depends on whether you want to keep him as a friend or not.
> Granted he shouldn't have gotten himself into this situation but you can't be charging the guy interest.


Have to agree with Gabriel - I wouldn't ask a friend for interest unless it had been agreed upfront. If you had had to borrow the money from the bank or on a credit card to lend to him and had to pay interest on the loan, then I could understand it.

You never know, you might need your friend's support one day, be it financial or emotional, and will be glad you were fair with him.


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## Protocol (5 Dec 2005)

I have given loans to 2 friends, 3 loans in total.

They offered to pay me interest. I wouldn't have given the money without it.

The second guy, with whom I used to share a house, borrowed 1000, and repaid 12*86 = 1032.  That was messy, as I had to lodge all 12 cheques.  Now he's borrowed 2000, to be repaid by SO, 22*100 = 2200.


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## Eurofan (5 Dec 2005)

Protocol said:
			
		

> They offered to pay me interest. I wouldn't have given the money without it.


Agreeing these kind of terms is something else entirely. I doubt your friend would appreciate it if you came round at the end of the term and upped the interest!

Btw am I the only one appauled at this practise or is the term 'friend' just being bandied about when people really mean 'acquaintance'. I have many acquaintances but only a few people who I would truely call friends. These people have been there through thick and thin as have I. Money rarely comes into the equation and on those rare times of dire need it is given without hesitation and certainly without looking for interest  Loaning money to 'acquaintances' is another thing entirely, I simply don't.

I presume people don't look for a loan unless they are somehow desperate, I can't abide by those who would seek to profit by this...


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## NiallA (5 Dec 2005)

agree entirely eurofan,

a friend in need, etc


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## Corolla97 (5 Dec 2005)

Hi Eurofan  - "gouging" and "I can't abide those who would seek to profit by this.." ( sorry I don't know how to use the quote facility ) - a bit strong I think. 
I only said " a bit more".
This guy bought a plot of land down the country with planning permission in 1999 for 5,000 punts. He recently sold one field for around 40,000 Euro and he still retains one field (without pp). 
So he has made a tidy profit during the the interval of owing me money and as it stands I have made a loss.
His own family wouldn't loan him any money. Neither would he have got a loan from a bank.


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## Eurofan (5 Dec 2005)

Corolla97 said:
			
		

> His own family wouldn't loan him any money. Neither would he have got a loan from a bank.


So?

With respect you seem to be missing my point. It's not about the _transaction_ it's about the *relationship*.

Loaning a friend money during hard times is something we may do (if able) as part of a long-term friendship and all that that entails. What it doesn't entail is turning around when his situation has changed and seeking payment for that friendship regardless of how much.

A genuine suggestion then, perhaps it's time to evaluate your relationship with this person and decide which is more important; the money or the friendship.


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## Corolla97 (6 Dec 2005)

It's not about the _transaction_ .....

 ...regardless of how much.

So Eurofan if the amount loaned was E10k or E100k and the time involved was 10 years would you still stand by your "friendship argument"?


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## soy (6 Dec 2005)

This seems to be a bit of a mess, unless you agreed up front that there was going to be some form of interest payment then it will be difficult to introduce the concept now without risking a falling out. 
You could try raising it in a light-hearted fashion and see what the response is.
For the sake of a couple of hundred euro, is probably easier and less hassle to forget about it and just get back the capital.


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## Gabriel (6 Dec 2005)

Corolla...for what it's worth and this is really no ones business but your own. Ask the guy if he can now repay you in full. Then move on. Forget about looking for interest. You didn't ask for it upfront so to ask for it now would be very bad form.

Incidentally, if I loaned a "friend" money (no matter how much) I would only expect the money back. Mind you I would only ever loan money to my close friends who I've known for years.


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## Corolla97 (6 Dec 2005)

Eurofan said:
			
		

> So?
> 
> The point is that if  I hadn't given him the money he would have been forced to sell the land some years ago and thus would have made considerably less of a profit.
> I am only seeking the return of the value of the money that I have given to him.


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## angie (6 Dec 2005)

For what it is worth if nothing was agreed up from I would ask for the money now.  If the friend is any way decent he will give extra or at the very least a gift voucher.  If he doesn't learn the lesson and forget it.  What a pity though you didn't take a share of the investment !!!


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## michaelm (6 Dec 2005)

Corolla97 said:
			
		

> Am I justified in looking for a bit more back off him to compensate me for the reduced purchasing power of the sum involved in today's terms?





			
				Corolla97 said:
			
		

> The point is that if I hadn't given him the money he would have been forced to sell the land some years ago and thus would have made considerably less of a profit.
> I am only seeking the return of the value of the money that I have given to him.


Sounds like you've answered your own question here. You don't put a question mark at the end of a rhetorical question.


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## JohnnieKippe (6 Dec 2005)

Don't ask for interest unless that was agreed at the beginning. I would however get them to start repaying the loan back to you or you may never see it again.


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## CCOVICH (6 Dec 2005)

I have borrowed money off my Dad.  I pay him ECB plus a margin of 1.5%, which works out better than him having it on deposit.

If I was your friend, I would repay more than I borrowed as a sign of gratitude.  If you didn't mention interest at the beginning, it might prove difficult now, but I feel that you are entitled to some element of compensation, friend or no friend. If they are any way grateful, they should acknowledge your assistance in some way (unless maybe they are still stuck for cash).

The replies so far seem to indicate that there are no hard and fast rules on this issue-'each to their own' etc.


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## Corolla97 (6 Dec 2005)

OK.
Thanks all for your comments.


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## oysterman (6 Dec 2005)

Are you a registered moneylender?

Do you have the required licence to charge interest legally?

How would you calculate and go about discharging the tax liability?


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## Marion (6 Dec 2005)

I think if I had borrowed money from a friend or family member, (as I have done) in a time of need, that when I were in a position to repay I would like to repay the capital sum with some form of recognition.

I don't think that I could just repay the capital. I think that would be really mean. 

I would give a gift - not necessarily money.

Marion


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## CCOVICH (6 Dec 2005)

oysterman said:
			
		

> Are you a registered moneylender?
> 
> Do you have the required licence to charge interest legally?
> 
> How would you calculate and go about discharging the tax liability?



Are you for real?


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## lfcfan (24 Jan 2006)

Is it worth ruining friendship for a small amount of 'interest'?


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## CCOVICH (24 Jan 2006)

You could have ruined the friendship by not giving them the money in the first place.  If people are going to fall out about a small bit of interest either way, they are not true friends IMHO.


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## Bonafide (25 Jan 2006)

It is worth noting that the interest foregone to date by the original posters comment is over €500 (using an average 3% return as suggested above) - must be a good mate all the same. I have loaned money in the past to friends, never for gain myself, but generally for smaller amounts though. I do think that loaning to friends puts a strain on the relationship. If I was put in that position, I think I would ask if I could Guarantor the loan at a financial institution.


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## WaterSprite (23 May 2006)

Coming in late to this...

Corolla, you mentioned that you think you should be entitled to some of your friend's gain because, without your money, he would have had to make different choices about his property.

However, you just gave this guy a loan of money, you did not co-invest in his venture - if he had lost money on his land transaction, would you reduce the amount you wanted him to repay?  It sounds to me that you actually want more than "interest" - you want a cut of his pie.

It's like loaning someone a tenner to bet on a horse that comes in at 100/1.  The person you loaned the money to may give you extra back as a thank you, but it would definitely be churlish to ask for it as of right.

Just be happy that your friend has made some money out of his property and be glad that you were in a position to help him do so.   

Sprite


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## oysterman (26 May 2006)

Good on you, WS!

You've hit the nail on the head - lending to a friend and then expecting to profit from the gesture is atrocious.

I made the point somewhat more obliquely and in a much less articulate way earlier in this thread and got my a**e kicked 


Lending to a friend ought to be a selfless gesture.


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## CCOVICH (26 May 2006)

No point letting this thread continue, oysterman-you made your point already, I don't see the need to repeat yourself, eveyone is entitled to their own view.

Thread locked.


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