Do You Believe in Usury?|
If I know you, and I "loan" you money, I do not charge ANY interest. In fact, if I know you well enough to loan you money, I probably won't get too exercised about getting it back either. I've been known to forget people owed me until they pay, and then I get a pleasant surprise.
In a world with a fixed (or relatively steady) rate of inflation, money starts to be worth less as time goes on, so unless you charge (or pay) a friend a rate of interest roughly equivalent to the rate of inflation, you are arguing that you're willing for the lender (in other words, you, it sounds like) to effectively lose money in order to provide the loan.
I find I'm curious as to what is the largest amount of money you've ever dispersed in a "loan" and how long it took someone to pay it back (if they did).
Personally, I definitely distinguish between "this is for you in a pinch, pay me back if you can" loans, and loans that are optional, for which I tend to charge interest.
It might seem gauche, but I always charge interest on any loan over a modest size, even to friends. This is because I've found that even if the loan is nominally interest-free, as long as it goes unpaid, it extracts an implicit cost in guilt, social tension, and/or feelings of obligation, and I don't think that there's anything either person can say to truly eliminate that cost. Charging interest makes it a business arrangement, where everything is neat and above-board.
nodnod. I think a big part of that implicit emotional cost is a recognition of the opportunity cost imposed on the lender.
Ummm... how much?.... ummmm... I'm thinking a bit over two thousand. We had it, they needed it, we "loaned" it to them. I'm pretty sure they paid it back... but don't recall. As I said, I don't worry too much about it. If you're my friend, I don't keep score.
I don't make commercial type loans, "optional loans", to friends. If they can't get the money from a bank or something, I guess they can wait for whatever it is, eh? (Wide screen TV? FAGEDABOUDIT!)
In a pinch loans? I don't make them either. That's what I'd consider relatively small amounts - $200 or $300 or so. I just GIVE them the money and tell them not to worry about paying it back. Some folks I just tell 'em to "pay it forward." But most "in a pinch" loans or situations would fall under the umbrella of the "you're my friend - and you need this." (I mean - what good are friends if you can't mooch off them once in a while?)
It also depends on how they approach me. If they ask for a loan, well, that's what it is. If they ask for help, same story - that's what it is.
And lest some Smart-azz think I'm made of money - NOT! God has always provided what I need so I've never worried about it. My wants sometimes get pinched off - but the NEEDs have always been taken care of. And sometimes that need was filled via couch-diving for the kid's milk money, but it gets filled! :-D
That is assuming that you place value on the money being lent. In Grimfaire world, money has no inherent value other than what I can use it for today... once it leaves my hands, I cease to care about it. Be that being lent to a friend or paying for dinner.