personal loan... what interest should i charge?

[Hoagie]

guys, thought u might help...

I've a friend who owes me money... its actually a favor and he promised to give it back in a couple of months. The thing is, it took him more than that time, six months to be exact, to return it.

He really feels bad about it and he offered to add interest from what he borrowed. Question is, what interest should I give him? Is there a standard rate when it comes to these transactions? I don't want to give him a too high or a too low rate - I just want to give him a fair rate. What do you think?

[Anck-Su-Namun]

I wouldn't charge him any interest. I'd ask him to pay the full amount and that's it. He's a friend naman e. Besides, I'm not a bank so why the heck should I charge interest? He was probably guilty about not being able to pay you in time which is why he offered to pay for interest. If you are the friend that you say you are, then do away with the extra charge. If you were to experience the same situation in the future, would YOU want your friend charging you interest? He probably had a good reason for not being able to pay in time anyway.

I have friends who borrow money from me too. In fact, one of them hasn't paid me back and it's almost been a year. I don't bug her about it because I know what her situation is. While she would like to pay for her debt, her financial situation prevents her from doing so. And since I don't really need the money yet, I'll just wait until she's ready to pay. Heck, it's just money. Friendships don't even come close in value.

[Hoagie]

Yeah I know... believe me, I persuaded him not to. Point is, he used it for a business and he was able to make a good return out of it. I guess its just his way of returning the favor? So he just left me with the question how much interest should I charge him.

Yun lang... I know there are usual things like these, I just wanted to know what's the usual rate...

[shallow]

have your friend owe you a favor instead of charging interest. that way, you get something you'd want and he'd feel "forgiven".

[KuyaDanny]

If you kept your money in the bank instead of lending to him, you would have earned 8-10% per annum. If he borrowed money from a bank, he would have paid 16-20% per annum, maybe even more.

Why don't you charge something in between, such as 12%. You made money, and he saved some. Both of you might be happy that way.

[egg]

Personally, I don't charge interest unless it's a personal loan [That's if my friend used the money for personal reasons: to pay the rent, tuition fees, buy groceries, etc..].

If my friend borrowed the money to invest in a business or any money making scheme, we usually discuss interest. Most often, it's 10%.

VICE-VERSA.

Although I only borrow money from my parents & my sisters, same goes but the interest is so low, it's negligible.

[KingTriton]

Gawin mo na lang Alipin friend mo eheheheh :D :D :D

[weapon_x11]

Pa-treat ka na lang sa Starbucks or Figaro and that should be it. I wouldn't charge a friend interest on money. I would however let them treat me lunch or dinner or coffee. :D

[saywhat]

consumer loans are usually charged at 3.75% to 4% interest rate monthly.

but he's ur friend. why charge interests?

has he paid u the full amount? if so, then there. u've got no problem anymore.

[saywhat]

but SME loans are usually charged at 4 - 5% interest rate. depende sa loan amount.

[Hoagie]

Thanks for your reply guys! We've settled it and we're just gonna have lunch at a nice place - at least busog kaming dalawa diba!?

Thing is, I'm giving back what he borrowed me... this time as an investment - he's got something going which really pays off big time!

[egg]

Originally posted by Hoagie
Thanks for your reply guys! We've settled it and we're just gonna have lunch at a nice place - at least busog kaming dalawa diba!?

Thing is, I'm giving back what he borrowed me... this time as an investment - he's got something going which really pays off big time!
You're welcome.

Good for you. *okay*

You not only get a good lunch, but you'll also get a good return on your investment... good luck, Hoagie! :redsmile: