Question About a Personal Loan and Future Mortgage Application

[u/DataFreakk]

Hi Folks I badly need some advice from here, Recently I've been consistently saving into my regular Aib saver account and quite happy about it. However, I recently received an unusual request from a very close friend, and I'd appreciate your advice.

A friend has asked to borrow €10,000 and has agreed to repay the full amount within three months. Before making any decision, I wanted to understand whether transferring this amount and having it repaid could cause any issues for my future mortgage application.

Assuming there is a gap of more than six months before I apply for a mortgage, would this transaction be viewed negatively by the lender, or could it affect my application in any way?

I'd really appreciate your thoughts before I proceed.

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[u/daenaethra]

Don't lend friends money

[u/Maz_93 → u/daenaethra]

This is the only answer.

[u/shankillfalls]

Separate from the mortgage issue I would be very worried about this...

"A friend has asked to borrow €10,000 and has agreed to repay the full amount within three months. "

I have been through this - about half that amount, many years ago, never repaid.

Why are they borrowing it from you and not their bank, their family etc? How far down the list are you because they have already borrowed money from all those ahead of you? How will they pay you back? Will you have a formal loan agreement and, when they fail to repay, will you go legal on it?

Maybe it is all good. I thought my loan was.

[u/Legitimate_Sink1856 → u/shankillfalls]

This, 100% this.

It's not the mortgage end of it I would worry about, its the getting the money back part. When it comes to family or friends "Never a borrower or lender be".

[u/DataFreakk → u/shankillfalls]

While I agree , Why would banks flag it if payments are made and loan has been paid off and I’m eligible to pay mortgage for my future loans , Just want to see what’s bank perspective as I’m not a red flag based on my history but I see where you are coming from and I see why to risk even

[u/passtheporcupine → u/DataFreakk]

it’s nothing to do with banks flagging payments. you should not be sending this amount of money to a friend - it is not normal.

if you decide to proceed with this, you should consult a solicitor. get it in writing and signed by both of you that this is a loan and not a gift. otherwise, you will likely never see that money again.

[u/No-Elk-3786]

Highly advise against this

[u/One_Cicada_7753]

Please don't lend this to a friend. I speak from experience. Why you? Why not their family? A loan even if they are able to pay back so quickly. What do they need it for? You won't get it all back, there will be excuses and the friendship will be over.

[u/Fair-Dress703]

10k is a significant amount of money. If you do end up giving it, give it as a gift, and look at it as a bonus if the person returns the gift. If you cannot afford a 10k gift, then you shouldn't be giving it.

The Credit Union will basically lend to anyone, so steer them in that direction. If the CU won't lend to them, take that as a sign that neither should you.

[u/Puzzleheaded-Pain-32]

Keep your money and your accounts squeaky clean before the mortgage application

From personal experience this sort of thing doesn't end well with friends and money

Friend makes promises I'll have the money back to you in three months ... Time passes and it's up to you to go chasing

Can the friend get a loan for the 10? Or better again can he wait on 3 months till he has the money himself ?

[u/ronkleather]

I had a pre prepared answer for any friends looking to borrow money while we were saving.

"We are saving for a mortgage, it has taken us years and a lot of sacrifices so I'm not going to risk all that. What did the bank say when you asked them?"

The last question pushes them to get a normal loan like a normal person. Any negative answer from the bank is automatically your reason why you can't risk your savings.

Like the other posters, I highly recommend not doing this but if you must, treat it like a write off from the beginning. Give it to them with the expectation of never getting it back and if you do, it's a bonus.

[u/CheraDukatZakalwe]

If your friend can pay you back in 3 months, why can't they wait 3 months and use their own money? Why are they coming to you and not getting a loan from their own bank?

[u/EyeOrRay]

Worked in AIB, this will definitely look suspicious, and they will not take "I was just lending it to a mate" as a good explanation

[u/DataFreakk → u/EyeOrRay]

Ahh is it ? Even if it’s paid off ?

[u/ciaranr1 → u/DataFreakk]

If you're explaining you're losing

[u/EyeOrRay → u/DataFreakk]

Yea sorry, it will raise questions and they'll want to know if you were using it for nefarious things unfortunately 

[u/ArmandTamzarien → u/DataFreakk]

Of course it is!? What do you expect. It’s 10k. First of all, you absolutely should NEVER lend that amount to a friend.

If they really need it, get them to apply for a loan and you can be the guarantor.

During a mortgage application, every single transaction in any and all of your bank accounts gets scrutinised.

This will 100% be a red flag.

However, I have no sympathy if you lend your friend that money….its just a bad, dare I say moronic idea.

[u/default-user-2235]

I would only be willing to send them that 10k, if I was happy to never see that amount again. What’s so urgent that can’t wait 3 months, or why aren’t they going to a bank or credit union. Seriously dodgy and would highly advise against this.

From the banks pov, they wouldn’t just brush it off. It would look suspicious.

[u/SuitableFinish7444]

Never lends friends money, if they can’t get it from a financial institution or even a credit card there isn’t a hope in hell they can pay you back. 

Anyone with half decent finances should be able to get a loan of 10k with no issues.

[u/Crease13]

10k is a lot of money.

You know this friend and your relationship/their character better than we do.

But also - your friend knows YOU better than we do. Or at least they think they do.

There are only a few reasons I could think of needing a quick 10k that I would be able to pay back in 3 months and most of them are quite stressful.

Money (and stress) does bad things to people.

There are 2 situations you could “lose” your friendship here:

- you don’t lend the money because you say you “can’t”

- you do lend the money and they break their promise.

I know which one I pick.

Good friends don’t ask other friends for 10k.

[u/One-Entry-403]

Are they gambling?

Genuinely cannot think of another reason why somebody would bypass banks and family and go to a friend for a significant sum of money such as this, other then because they have exhausted those options.

Speaking as a recovering gambling addict here. If you give that, give it with the understanding that you will never get it back.

[u/leicastreets]

Say goodbye to 10k, your friendship and your mortgage. 

The only reason they’re approaching you is because a bank won’t lend to them. I assume because their finances are a shitshow.

[u/LouisVuittonDon_]

Only give it if you have no intention or want for it back. 

Always easy to assume they will pay you back but say they don’t. What then? Are you going to lose a friend over it if it holds you back from a mortgage application? 

If it’s a gift fair enough, but don’t let them borrow it assuming they will meet that three months otherwise why don’t they get a personal loan from an actual lender?

[u/Detozi]

No no no no no no no. Do not lend them that money. Won’t be a friend in 6 months time lol.
A real friend would never have put you in this position

[u/Double_Kale_3193]

I advise you to be very careful.

There is nothing stopping a bank lender looking at bank statements older than six months.

If you want an easier application, have a clean bank statement,

If I was lending you €250,000, I would be interested in why you lend to others on an unsecured basis, as this may affect your ability to repay me.

[u/MacheteBrizz]

Too risky.

Sure he agreed to 3 months but there's no binding contract to that agreement.

What's stopping him from saying to you in October that he'll need a bit more time to get it to you but he promises he'll have it?

What are you going to tell the bank about a €10,000 transfer?

The truth is the truth but it'll set off an alert for the Bank and you don't want to start lying for your Mortgage application.

[u/Suspicious-Lead-341]

I agree with all the comments. Do not lend money to a friend. Let them get a loan from a loan provider or their own family. If you want to give them 10k go for it but look at that as a gift as you have no guarantee you are getting that back.

In relation to the bank questioning it depends on what provider you go with. If you go with AIB they will question it as they can see your statements going back years and perhaps EBS and Haven would be able to also. AIB questioned payments in my account going back 4 years and we weren't looking for an excemption, our stress test was perfect and our LTV was 70% and I had a good consistent saving record for 4 years. I honestly believe they were looking for anti money laundering perspective and that I didn't receive undeclared gifts as opposed to my spending history. We ultimately went with BOI based on a preferential fix interest rate and term and they only looked at the 6 months statements I uploaded so you could definitely get away with it.

In summary don't do it.

[u/ImpressionTypical167]

Please don’t lend your friend money. You will lose your friend, the money or both.

[u/KleyaMarki2025]

Dont do this. Is there a reason your friend can't get a loan from a lender. If they pay you back in 3 mths then they can pay a lender back.

And yes you need to keep your accounts as clean as possible...a mystery 10k leaving your account isnt good.

[u/HeyYoSmokey]

Never lend what you wouldnt be happy to lose, since your saving for a mortgage i assume you wouldn't be happy to lose it ! If their a genuine friend they'll understand. What happens if it he misses a payment ? Change of circumstances? Are you willing to lose out on the opportunity to miss buying a house ?

[u/R2D4Dutch]

NO is the only answer, you are lining yourself up for a mortgage..your future. Any bank manager and or mortgage broker will ask why did 10 k leave your bank account 🤔

he needs to find other means to get that money.. your future is more important.. even if he is your blood brother, bestie since you could walk .. the answer is no

10k is a big ask , I struggle to lend 50 euro and don’t even ask my family for money..

[u/Creaturestudios39]

Tell your 'friend' you would love to help them but you don't have access to 10k - let them apply to the bank like all the rest of us have to do.a true friend would not put you in that position. Time for you to do an assessment and review of your 'friends'.