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?
2007-07-14 08:24:24 · 7 answers · asked by xo 2 in Business & Finance ➔ Personal Finance
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.
2007-07-14 08:27:27 · answer #1 · answered by Mike Frisbee 6 · 3⤊ 0⤋
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
2007-07-14 16:38:37 · answer #2 · answered by dee2zo 3 · 1⤊ 0⤋
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.
2007-07-14 17:44:01 · answer #3 · answered by STEVEN F 7 · 0⤊ 1⤋
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.
2007-07-14 15:42:04 · answer #4 · answered by unknown friend 7 · 2⤊ 1⤋
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.
2007-07-14 15:33:03 · answer #5 · answered by Gerald 6 · 2⤊ 2⤋
never loan to friends, if you want to keep them as friends.
2007-07-14 15:29:39 · answer #6 · answered by Anonymous · 4⤊ 2⤋
You don't, you will get burned and loose the friend. I know because It happened to me.
2007-07-14 15:27:59 · answer #7 · answered by mike_alegend 6 · 3⤊ 2⤋