SINGAPORE: A woman shared on Reddit’s ‘Ask Singapore’ forum that she’s stuck in a tough spot after her dad refused to pay back the $5,000 loan she gave him five months ago.
In her post, she explained that her dad needed the money to help him “tide over his retirement transition,” as he only made about $2,500 a month. Wanting to help, she agreed and lent him the money.
However, things have changed since then. Her dad’s financial situation has improved, and he’s now earning around “$5,000 a month as a Grab driver.”
When she asked him to pay her back, she was shocked by his response. He told her that she had “given it to him,” and he had no intention of repaying it.
Adding complexity to the situation, she explained that her dad is in a relationship with a Filipino woman and frequently travels to the Philippines.
“He is making trips to the Philippines twice a year to bring clothes and apparel to her kids, nephews, and nieces,” she wrote. “I’m quite at a loss for words; please help me to process this. What would you do?”
“Now you know what he’s like; don’t lend money to him again”
In the comments section, many Singaporean Redditors said she probably won’t get her money back.
One Redditor said, “The $5K is a write-off. Better take it as such and move on. Put your energy into something else and focus on earning to recover the amount.
Now you know what he’s like; don’t lend money to him again, and if you do, do it with the knowledge that you’d never see the money again.”
Another Redditor shared a similar sentiment from personal experience:
“I lent my dad $12,000 about 10 years ago with no intention of getting it back. He returned it about a year ago. Lending money to family is tricky.
It’s best to view it as a loan with no time limit; hence, only lend money you can afford to lose.”
A third Redditor, however, took the situation in a different direction and suggested she focus on protecting her dad’s assets, particularly in light of his relationship with his girlfriend.
He wrote, “Plan to not inherit any money from him. But try to protect the house, assuming he’s a homeowner. Also, if he brings her over, be on guard that he may try to name her as his CPF beneficiary.”
Things to consider before lending money to family or friends
According to Investopedia, before lending money to family or friends, it’s important to consider whether giving out the money will strain your finances.
For instance, if you plan to use that money for something important, like paying bills or covering essential expenses, it’s probably not the best decision to lend the money.
However, if you have a solid emergency fund and some extra cash to spare that month, you might be better positioned to help.
That said, even with extra funds available, you need to consider a very important question: How would you feel if they couldn’t pay you back?
Would you be able to let it go without hard feelings, or would it cause tension between you? This is a crucial aspect to consider before offering a loan to someone close to you.
As financial experts often say, it’s best only to lend the money you’re okay with possibly losing. That way, if they can’t repay you, it won’t become a major source of tension or bitterness.
Read also: Man seeks help online after friend who borrowed more than S$20k from him cut off all contact
Featured image by Depositphotos (for illustration purposes only)
