‘I Lost My Money & My Friend’! Beware- Don’t Lend Money, You Could Lose Your Life?

‘I Lost My Money & My Friend’! Beware- Don’t Lend Money, You Could Lose Your Life?

Mangaluru: Yesterday, I received a Whatsapp from my friend -Francis Aranha, a NRI from Gulf and former manager of a Flight Catering facility in Mangaluru, with a quote stating “I Had My Money & My Friend, I Lend My Money To My Friend, I Asked My Money Back From My Friend, I Lost My Money & My Friend”- and this quote was a perfect match towards my experiences lending money to my friends, and repenting terribly now for doing so. And this quote also suits the recent brutal death that a young lady in Mangaluru faced by lending money to a friend/stranger!

So the bottom line here is that “Never lend money to a friend, if you do lend money to a friend, you should be prepared to lose the money or lose the friendship or you never know, you could even lose your life”. The advice not to lend money to a friend is bitter pill to swallow and it negates the very essence of the “a friend in need is a friend indeed” saying. However, it is hard to ignore your emotions and refuse to lend money to a friend. This article seeks to help you make logical personal finance decisions by giving your three reasons you should think twice before you lend money to a friend. Getting your money back might be much stress than it is worth.

Before getting more into my experiences of lending money to my friends, let’s talk about Ms Shreemathi Shetty, aged 35, a native of Polali Mogaru, but was residing in a newly built house four years ago in Amar Alva Lane, and was managing a fan/appliances repair shop at Attavar-Mangaluru, had lend Rs 60,000 to a friend/stranger- and when she insisted the person who borrowed the money to return it back, she was murdered. After the person murdered her, he chopped Her body chopped into pieces, stuffed in two gunny bags and dumped on the road side in two different locations. But luckily our Superb cops were quick enough to nab the culprits who killed Ms Shetty, just because she had come to their doorsteps to get her money back. This incident has shocked the citizens of Mangaluru, especially the women, since such a horrific murder where a woman’s body cut into pieces, was the FIRST time in Mangaluru.

Ms Shreemathi Shetty ……..

The arrested persons are Jonas Samson and Victoria Mathias, the couple residing at Sooterpet, near Valencia, Mangaluru. As per police reports, on May 11 Ms Shetty had visited the couple’s residence asking them to return Rs 60,000- but a verbal altercation took place between them, and Jonas hit Shreemathi with a wooden block, and she collapsed and died. The couple then had decided to cut her into pieces, stuff the body parts in gunny bags, and transport them in a scooter, and dump them at two locations. While checking into CCTV footage at various places in the city, it was noted that Shreemathi Shetty, who always travels by car to her appliance repair shop that she owned, on that day she rode her scooter and instead of going to her shop she went directly to the couple’s place in Sooterpet.

……..Her Killers- Jonas Samson and Ms Victoria Mathias

The footage, including other clues helped the police to track down the couples residence, and on 14 May night knocked on the couple’s door. Coming to know that police had come to apprehend him, Jonas was reluctant to open the door. But the police tried their own way in entering the house, and Jonas seeing the cops entering the house tried to commit suicide, and he was quickly rushed to a private hospital, where he is under tight security observation. Police will be releasing more details on this incident once they interrogate Jonas, after his recovery. Many had suspicion that her ex-husband could have planned the murder, but it was not true. Police have found the weapons used to kill Shreemathi, her scooter, her mobile phone and gold ornaments.

It is learnt that Jonas was in huge debt after he had incurred loss in a fast food business he managed, so he had shut it down a month ago. He was even asked to vacate the rented house by the owner since he skipped paying rent many times. So from Attavar, the couple had moved to Sooterpet recently, it is learnt. So with all these financial problems, the couple were not able to repay Shreemathi’s borrowed money back, so they brutally murdered her. How cruel one could be to kill someone who helped them during their financial crisis. Shreemathi didn’t deserve that kind of horrific death for helping a person with good faith. This may be one example, but there could be many more taking place of the same nature.

Now coming to my experiences in lending money to my friends, which has not only made me lose money, but also their friendship- but I feel it’s better to lose money, than your life by getting into an argument or fight in recovering your money. When I returned from US few years ago, many of my friends approached me for loan, and in good faith I obliged them. Some were genuine cases, where they really needed money to solve their financial burden, but others simply took me granted, borrowed money for their pleasure. While those real good people who had financial problems returned my money back, others simply gave excuses and some even had threatened me saying “What will you do, if we don’t return your money back?”. While many of them are seen driving high-end cars ( while I am riding a scooter), taking vacations, enjoying a luxurious life-but can’t repay back my money. Bah humbug!

So no more lending of money, and I don’t care if my friends are not happy with that, for I don’t want such ‘loser’ kind of friends. Therefore from my experiences, in most cases when you lend money to a friend, it happens in informal settings and it is unlikely that you’ll have a written agreement to document the loan. The borrower usually states how long it would take him to repay the loan and the lender will agree irrespective of whether it is convenient or not. There’s also usually no mention of interest payable on the loan and penalties in the event of a default in the repayment.

The open-ended nature of the loan makes it less of a priority for the borrower to repay because “Alfie will understand.” The lender however may find it hard to ask for repayment even when he is in dire need of the money because he wants to avoid awkward social encounters. Hence, you could start having feelings of resentment when your friend offers to pick the tab when eating out with a group of friends while his debt to you remains unpaid. The fact that a friend is asking you for a loan suggests that they are unable to get loans from conventional funding sources. It is either they have bad credit, they have too much debt already, or they don’t want to commit to signing paperwork that will put them under a legal obligation to repay the loan within a specified time frame. There’s a reason your friend can’t get a loan from conventional sources and if they are really your friend they’ll think twice about placing their financial burdens on you.

If you really want to help them financially, advise them to consider applying for personal loans, they can always find a personal loan irrespective of their credit score and creditworthiness. Better still, encourage them to take personal finance classes, financial education classes, or go for debt counseling. You may not be able to afford the loss of the money or the friendship. Sometimes, it may not be smart to lend money to friends if you have financial obligations that could hurt your credit if they fail to repay their debt in good time. If you are in the same social circle as your friends or if you have similar spending habits, you might be close to having money problems of your own if your friends already have money problems.

However, if they don’t repay the money in good time, you could run into financial troubles and destroy your credit. If you mount too much pressure on them to recover your money, your friendship with them will be strained and you’ll be left with one (or more) less friend(s). If you really want to help them with money, take a critical look at your finances to see how much you can afford to give them as a cash gift. When they ask you for a loan, tell them that you don’t lend money to friends as a matter of principle but you’ll gladly GIVE them a certain amount to help them along. For instance, if they ask for a loan of Rs 10,000, you may offer them a cash gift of Rs 1000.

If they are truly your friend, they’ll take your gift (or job offer) graciously (or they might refuse) but they won’t be asking you for a loan again. By the way, if they stop being friends with you because you refused to give them a loan, you may want to take the time to ask yourself if they were really your friend in the first place. So in conclusion, BEWARE in lending money to others, including your friends. Because there are many bad people in town who borrow money and don’t give back- it has been their habit. They will live a happy life, but won’t bother to give back the money borrowed. So the best way to avoid all such hassles and headaches, is to STOP lending money, and if your friends or others don’t like it, stay away from them-you need friendship with money borrowers?

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