I heard of someone, “Friend A”, who loaned 2,000 to “Friend B”, against her own savings account. *The Bank* gave the 2,000 Friend B and Friend B paid the Bank monthly loan payments. I’m assuming if Friend B defaulted, the Bank would take money from Friend A’s savings. Has anyone heard of this type of loan? Know what it’s called and who offers it?
How Do I Securely Loan Money To A Friend?
February 14th, 2010 by Home Loans Leave a reply »
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It’s called a Passbook Savings loan
Friend A needs to make sure that everything is in writing regarding the loan agreement with Friend B, and have it notarized.
It is a passbook savings loan. If you have 2000$ in the bank you can borrow against it, but not the full 2k. I think it is maxed at 80% ( so if you have 2k you could borrow 1600$) the % depends on the bank.
That does not make it secure for you however, it only means your friend will get the loan.
In the interum…what happens if you two have a parting of the ways? Or better yet…what if you tie up this money and something happens and you need it?
It is really nice to want to help friends, but a true friend wouldn’t ask to borrow money. There must be a reason why they can’t get their own loan in a conventional manner…..
Think about it
You don’t, you will get burned and loose the friend. I know because It happened to me.
It’s called a secure loan in which you have a co-signer.
Yes if the first person defaults the co-signer is on the hook for it.
The co-signer works in lew of collateral to the first person but the second person will require collateral.
NEVER LOAN MONEY TO FRIENDS OR RELATIVES..
The friendship is over and you will never get the money back…
Does it say BANK on your fore head–don’t loan money.
Someone once said, it you loan a friend money and never see them again, was it worth the money?
Why does Friend B want the loan anyway? If they are trying to establish a credit history, I recommend learning to live on less than you make. In the long run, you have no choice. The sooner you learn, the easier it is.
never loan to friends, if you want to keep them as friends.