Personal Loan

[mrporoto]

A friend wants to borrow 10k US for 12 months,for his business,what would be a fair interest rate?

 

[tangueraintrepida]

My advice is to never loan money to friends or family unless you can truly reconcile in your mind that if they don't pay it back, you will make it a gift to them and not destroy your relationship. You may also need to resolve that it may destroy the friendship anyway.

I loaned $500 to a friend many years ago, and she got so paranoid about not being able to pay it back that she completely cut off all communication with me. Everytime I would see her she would go on and on about how she will pay me back soon, even though I never asked about the money. I was okay with just giving it to her since it came from a life insurance settlement after my mom died, and I knew that my mom would have wanted me to help her. We could never have a normal conversation after that, and I really missed her friendship.

That said, if your gut tells you to loan him the money, consider what his alternatives are if you weren't there to help him. He likely has bad credit if he can't get a credit card or bank loan to cover $10K. Credit cards for great credit are hovering around 12-20%. If his credit is a bit dodgey it will be much higher than that. If you are good friends and really want to give him a break, give him a 5-8% loan. If you want to make a little money off of the deal, I'd say 10-15%.

In 2001 my father loaned me $10K to start my first business at 8% interest. It was equal to the going rate for an SBA loan at the time. He never asked for a single payment, but I paid him off in full 2 years later. You may want to check out what SBA loans are going for these days. Suerte.

 

[Rich One]

A loan in US dollars in Argentina, will depend if from a bank or loan shark, if salary receipt available, what collateral, for what period of time. What is his credit record in VERAZ. For a bank loan here in pesos the rate will be around 30 % per year. In Dollars at least ·24% or what my US CC's charge on cash advances.

 

[PhilinBSAS]

My advice is to never loan money to friends or family unless you can truly reconcile in your mind that if they don't pay it back, you will make it a gift to them and not destroy your relationship. You may also need to resolve that it may destroy the friendship anyway.

........

That said, if your gut tells you to loan him the money, consider what his alternatives are if you weren't there to help him. He likely has bad credit if he can't get a credit card or bank loan to cover $10K. Credit cards for great credit are hovering around 12-20%. If his credit is a bit dodgey it will be much higher than that. If you are good friends and really want to give him a break, give him a 5-8% loan. If you want to make a little money off of the deal, I'd say 10-15%.

In 2001 my father loaned me $10K to start my first business at 8% interest. It was equal to the going rate for an SBA loan at the time. He never asked for a single payment, but I paid him off in full 2 years later. You may want to check out what SBA loans are going for these days. Suerte.

Bugger Ive lent my youngest son a lot more than that for the same purpose and interest doesnt even come into it - not even from the beginning!

On the other hand I borrowed money off my dear old Dad who felt it necessary to involve collateral and charges on the house etc not because of lack of trust but instead because that was the business way of doing things to the chartered accountant chartered CIS mind

But Mr Bean this is anglo-saxon thinking. Chinese and Indian communities reconcile family/friendship and finance issues seemingly differently but also effectively.

Right question but maybe asking the wrong people?

 

[Crema Americana]

Be careful - generally I think it's a bad idea to get into lending significant amounts of money to friends.

Is he Argentine (or living in Argentina earning in pesos)? Because if so, it might be difficult (if not impossible) for him to pay you back in dollars. What if his business venture fails? These are things to consider.

 

[vagabundo]

A friend wants to borrow 10k US for 12 months,for his business,what would be a fair interest rate?

Well take into account that the world bankster players are working on shutting Argentina down and Argentina is assiting thru dumb and bumber ecomic policies.. do you really think there is a good chance your friend will even be in business a year from now? Multiply that by your personal tolerance of a 10K loss.. Do a little more math.. understand that Argentines look at debt like romance.. if we break up oh well. Then take all that into account and make an educated decision..

 

[gsi16386]

bankrate.com

 

[syngirl]

You're going to lend a friend 10,000 USD -- and how is he going to pay you back? It is not a good deal for you, for him, nor the friendship. Even if you set a fair interest rate, he will be at the mercy of the black market to pay you back. The friendship could really really sour. If you are willing to lose 10k USD, to be paid back in pesos, to view the loan as a gift, or to forget about the friendship, go ahead and give the "loan". But I do not expect that you will get that money back anytime soon or in the form that you expected.

 

[syngirl]

Argentines look at debt like romance.. if we break up oh well. Then take all that into account and make an educated decision..

I have to say, I have heard a similar song these past few months, a lot of people here have faith that if/when things go tits up their debts will basically be forgiven/reduced/devoured by inflation/devaluation will take care of it all etc.

 

[mrporoto]

My friend has income from US were he is going to go for some months,San Francisco,he is Argie and has a good business plan.He
is very committed,hard working and determined to make his business a success.We have a "pagare" which is used for a guarantee
and life is a gamble but was just wondering about taking 10% as the interest rate.I have known him several years.Thanks for your advice,appreciated.