Giving a loan to a friend - advice needed, how to do it legitimately

[monkeycu]

There are 3 things in life you don't lend

Money , your car or your wife

One never returns the other 2 come back screwed 

[KC 71]

Never lend money out in Thailand unless you are prepared to walk away from it !


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[baansgr]

1 hour ago, Vacuum said:

Yes it is. That's why they can't get a loan in a bank.

Exactly, if person b is stupid enough to lend the money to person a, contract will suffice and as stated in person a will, however any default or event of death person b will struggle to get their money back. If I needed money, i would sell assets, person a should sell their condo and repay current loans through any equity they have.

[snowgard]

Why she not sell the condo and pay back the loans? This is a much more easier way!!!

[rwill]

How about another trusted co-signer for the loan?

[SS1]

1 hour ago, Vacuum said:

So why did the bank/s refuse her a loan?

 

The bank counts her salary as her only income, while in reality she also gets a decent amount of rental income from renting out the condominium. She doesn't want to declare this income as she would have to pay taxes on it. On the bank's books, she lives in the condo herself. 

 

53 minutes ago, 4MyEgo said:

Have you asked yourself why you want to lend her the money, her credit debt is not your problem, if she owes money on her credit cards at insane interest rates, the interest rates are not the problem, it's her maxing out her credit cards, meaning she cannot handle her credit cards, as a lot of people cannot do.

 

Regardless of what you write up, unless you have something of value to fall back onto if she defaults, you have a piece of paper worth nothing.

 

If the banks won't lend her anymore money, it's not because of the credit card interest she is paying, it's because she is already a risk, no doubt the have 1st mortgage on her condo, with the others seeing not enough value in it to go 2nd mortgagee.

 

It's ok to say NO, lending only pushing people further over the edge in my opinion, that's why I never lend to anyone, make your bed, lay it it, hard words, but the wiser.

 

She has realised her mistakes and wishes to close all her credit cards. This favour would enable her to do that. For the record, it is not myself who is planning to loan her the money, it is person B who is our good friend. He has no idea of legal matters which is why I'm trying to help. 

 

43 minutes ago, snowgard said:

Why she not sell the condo and pay back the loans? This is a much more easier way!!!

 

This is her plan B and a viable option. However, I personally rent/live in the condo owned by Person A and selling it would also cause me personal trouble (potentially having to move out). 

 

35 minutes ago, rwill said:

How about another trusted co-signer for the loan?

Yes, planning to have a lawyer from my company draft and co-sign it. 

[Guest]

Since you are the renter of the condo, form an agreement that all rent payments will go to "B" until the loan is satisfied, and make the sale of the condo contingent on TWO signatures.  The person borrowing, and the person lending.

As my father taught me, a contract is only a piece of paper that says we shook hands on a deal, if that handshake is worthless, so will the contract be.
 

There is a 75% chance this will all end in heart ache for A+B, but you are adults, and this is your choice.

 

People with credit card addiction do not suddenly "get well" ... they often see this as a clean slate to "rinse and repeat" from.

 

Best of luck.

 

[4MyEgo]

23 minutes ago, SS1 said:

She has realised her mistakes and wishes to close all her credit cards. This favour would enable her to do that. For the record, it is not myself who is planning to loan her the money, it is person B who is our good friend. He has no idea of legal matters which is why I'm trying to help. 

 

1 hour ago, snowgard said:

Why she not sell the condo and pay back the loans? This is a much more easier way!!!

 

This is her plan B and a viable option. However, I personally rent/live in the condo owned by Person A and selling it would also cause me personal trouble (potentially having to move out). 

It all sounds to entwined, you have yourself as the tenant who doesn't want to move, and person B risking to lose his/her money, if she hasn't learned her lesson. I mean do you know why she has gotten herself into this situation, e.g. gambling ?

 

Personally, I don't believe A has learnt her lesson, she may well be a gambler and could easily redraw on her credit cards once she has paid the money back with the money she gets from B, (it's possible).

 

What I would do if I was you, is ask B, to ask her to see her repayments on her mortgage over the past year, have they been late, on time, never paid, that should give you some indication as to her being a good repayer or not, I think the later, and as far as not advising the banks that she is renting the property out, also cause tax implications if caught out. The banks could foreclose on the loan if she is late on repayments and tenants have zero rights, lease or no lease when a mortgagor enforces their rights, the Conveyancing Act overrides the Tenancies Act, meaning your out anyway.

 

Personally, I would save B the hassle, and you, find yourself another pad if she can't get help elsewhere, she is not your problem and you don't know who else she has borrowed from, do you ?

[4MyEgo]

2 minutes ago, bangkokequity said:

Since you are the renter of the condo, form an agreement that all rent payments will go to "B" until the loan is satisfied,

That's all and good in theory, but will she be able to repay the bank or will they foreclose ?

 

Your words are wise, B should steer clear, and the tenant/poster should look for alternative accommodation if A cannot sort it because a lease/contract is worth nothing of the banks foreclose.

[Guest]

8 minutes ago, 4MyEgo said:

That's all and good in theory, but will she be able to repay the bank or will they foreclose ?

 

Your words are wise, B should steer clear, and the tenant/poster should look for alternative accommodation if A cannot sort it because a lease/contract is worth nothing of the banks foreclose.

The debt is Credit Card.  The loans is to lift the burden of excessive interest on the card payments.  There is nothing to "foreclose" in this story. Since A is the renter, B can rest assured A will send him/her the monthly rent.  Let's say the rent is 15,000 per month. The principle can be repaid in 20 months, and that is the real issue here.  The co-signature portion was just an idea to prevent her from selling the condo until the loan is repaid ... but my point is ... no amount of contracts between a Thai National and a Foreigner, can ... in the long run, stop the Thai (with a pink envelope) from doing whatever they want.

My point about the contract was this:  If a person's handshake is not enough, and you think you need a contract ... THAT is all you need to know!  Walk away! (so in this sense, at the end of the day, we are really on the same page)

 

[Speedhump]

After the usual idiotic replies (don't do it, etc.), seems like you are actually some sensible advice. 

[Sticky Wicket]

There's a very high chance that she won't use the 300k to pay off the loans, spend all the cash and then be back to square one with you 300k lighter.

[Sticky Wicket]

26 minutes ago, Speedhump said:

After the usual idiotic replies (don't do it, etc.), seems like you are actually some sensible advice. 

It's not idiotic, it's sensible. It's idiotic for him to lend it to her.

[davidst01]

google  'issan lawyers'. theres a french lawyer..... on his website one used to be able to downlaod a simple loan contract. Its in thai or eng. 

[ThomasThBKK]

25 minutes ago, Sticky Wicket said:

There's a very high chance that she won't use the 300k to pay off the loans, spend all the cash and then be back to square one with you 300k lighter.

 

Congratulations, 

you managed to not read the threat at all, ignoring everything op said.

 

 

PS: He's not loaning any money.

[taninthai]

Sounds like another person living beyond there means using credit cards,half the ferang population live like this to.

 My advice is tell your friend chop the credit cards up stop spending on them and start trying to clear existing debts ......borrowing more money when you already have debts is never a good idea.

 

P.s I bet your friend has a better car and condo than me,,,,but then again I don’t live my life on credit

[nycjoe]

Loaning money is like putting a down payment on a resentment. you are robbing this person of the ability to solve her own problem. you have to look at your own reasons for doing this and in the end you will probably lose more than one friendship.

https://www.psychologytoday.com/intl/blog/wander-woman/201103/stop-fixing-people

[Sticky Wicket]

15 minutes ago, ThomasThBKK said:

 

Congratulations, 

you managed to not read the threat at all, ignoring everything op said.

 

 

PS: He's not loaning any money.

I was assuming he is person B but doesn't want to say. 

Fair enough if he isn't.

If he isn't person B why is he asking an English speaking forum for help between two Thais?

Seems very strange 

Flip it and see. 

A Thai in the UK with 2 English Friends asking Thais for advice on the English loan system

[PerkinsCuthbert]

There are two useful verbs in English: 'lend', which is where you give money to someone on the (often false) assumption or promise that they will pay the money back, and 'borrow', where you are the recipient of money that someone is kind (or foolish) enough to advance you.

Actually, in Thailand there is a special third word that is almost invariably employed sooner or later in cases like this - 'thieve', as in the sentence, "The thieving son-of-a-bitch borrowed four million Baht from me in 1978 and never repaid me".

[1FinickyOne]

2 hours ago, SS1 said:

She doesn't want to declare this income as she would have to pay taxes on it.

Yeah, sorry but do trustworthy people act in this manner? 

[AlexRich]

^{Anyone who gets into this type of financial trouble is unlikely to repay any loan.}

 

^{if you are happy to give the money as a gift, so be it, but if you need the money best pass on the opportunity.}

[sanuk711]

3 hours ago, SS1 said:

4 hours ago, BigFun said:

Use a kai faak (Sale deposit) contract with the condo used as collateral/guarantee. Make sure there is 300k+ equity in the condo.

This is good advice, there is +300k equity in the condo. 

It's very safe, but an expensive way to set up, as you have to pay the sales tax twice---once when its placed in the lenders name and again (when) if, the debt is paid its transfers back into her name.

[brianthainess]

So you want to lend money to someone already in debt 

[Speedhump]

1 hour ago, Sticky Wicket said:

It's not idiotic, it's sensible. It's idiotic for him to lend it to her.

He SPECIFICALLY asked for no comments like that. So what happens, loads of morons clog up his post requesting information with off-topic dross. You can alway rely on the bored, booze-sodden or otherwise brain-cell deficient denizen of TV to screw things up.... 

[xtrnuno41]

If doing it all legall, you need lawyer, period.

 

Otherwise in Thailand it could be seen as "loansharking" and they destroy contract.

Although weird a credit card company isnt loansharking, only difference is personal against company.

IN this case it is nothing more then a business transaction. 

You want a will, contract and house in it. Only lawyer can make that possibly work.

Though you are all good friends, still there must be that force, it seems.

Person B is asking reasonable amount of interest and sure helps the person A.

I hope person A doesnt have more debts. 

It's a pity, as friends to person A, the friends didnt tell her and discussed before getting in debt of person A. What are friends for?! Sure person A did speak about all.  

 

 

[Small Joke]

You'll lose your money and your friend. People who need non-bank loans are telling you they can't manage money.

 

If they're really legit disadvantaged, just give them the damn money.

[ThomasThBKK]

Hey op,

 

to get this topic back on track, did you thing about p2p loans before? 

There are platforms that you can use todo that like: 

https://satangdee.com/en/

https://www.beehiveasia.co.th/

 

 

They are licensed by the BoT and take care of most legal pain, for such a small loan it's worth considering. 

 

This is however all quite new here and just recenetly regulated: https://canchamthailand.org/bank-thailand-issues-first-peer-peer-lending-regulations/

 

 

[4MyEgo]

3 hours ago, bangkokequity said:

The debt is Credit Card.  The loans is to lift the burden of excessive interest on the card payments.  There is nothing to "foreclose" in this story. Since A is the renter, B can rest assured A will send him/her the monthly rent.  Let's say the rent is 15,000 per month. The principle can be repaid in 20 months, and that is the real issue here.  The co-signature portion was just an idea to prevent her from selling the condo until the loan is repaid ... but my point is ... no amount of contracts between a Thai National and a Foreigner, can ... in the long run, stop the Thai (with a pink envelope) from doing whatever they want.

My point about the contract was this:  If a person's handshake is not enough, and you think you need a contract ... THAT is all you need to know!  Walk away! (so in this sense, at the end of the day, we are really on the same page)

 

Yes well aware of what you are saying, but there are many possible scenarios that could not hold up to a contract, a piece of paper.

 

I always look further down the line, for example what if the borrower told the bank that she could not afford to repay the banks mortgage on her condo, that is what I was referring too, what would A then do, i.e. continue to pay B or would he receive a letter from the bank advising him that he would have to pay the bank and not B.

 

I think you know the answer, foreclosure is always around the corner if you can't see it coming.

 

I think we both agree that B should keeps his hands in his pockets, A not get involved and let things work themselves out, worst case scenario, A might have to move, B retains his cash with zero interest, but still has his cash and as for A, well, she got herself in this mess and has to find her way out as opposed to dumping it on A, I say that harshly because if she didn't want help, she wouldn't of mentioned it, and as I said before, A should toughen up because he doesn't know what he is getting B into, e.g. what other debts does she have that A & B don't know about.

 

Read lots of stories here where people have owned condos and lost them from gambling debts, credit cards maxed etc etc, perhaps A might want to guarantee her to B, after all B is a friend and A feels confident enough to support A, right ?

[The Theory]

18 hours ago, SS1 said:

with a loan of around THB 300,000 with various credit cards. 

If balance on the cards are result of having good time, travel, and shopping, then this person won’t be qualify for a loan. 

 

[Mavideol]

my father taught me......only lend money to a friend if you are ready to loose both