The gist of this scenario is sympathetic, maybe a little stupid but to mostly the thought of seeing someone struggle is awful.
I have a friend who works two jobs as of now and still can't make ends meet. One job he's a personal trainer at a gym. The mayor of this particular town doesn't like outsiders apparently. So he doesn't like letting people work in his community, if you do you are considered a "contractor" and by his definition that justifies a lower salary or wage. Then he found out my friend was not only doing personal training sessions but also helping out the front desk staff, the owner of the gym personally asked him to do this extra job. As soon as they mayor found that out, he proceeding to forbid him from working the desk. Which has left my friend with minimally sized checks and falling behind on bills. GOOD OL"E CAHOKIA.
He's now gotten a second job to try to make his finances better but that is a slow process. The money is better hourly but the taxes are kind of bad. So as of today he struggles to make even the rent and car note.
So I offered him a way out of at least one of these issues. His balance on his car note is $475.00. I don't have the money as I am well Unemployed (Yeah stop being bug eyed and confused) Yeah unemployed. A very productive unemployed person LOL I use my unemployment checks to pay my bills and sell things I no longer need that are in impeccable condition (otherwise it all goes to the salvation army, if I know someone can still use and still in desirable shape) I just struggle with the fact that I want to work, not that my bills are outrageous.
My offer to him and the arrangement: My Capital One card has a balance of $400.61 of today and by the end of the next statement cut it will be $280.00. My offer to him is to pay the rest of his car note with my Credit Card (His Dealership does take CC). He then pays me $100.00 + anything he can spare at by the 30TH of each month for the next 4 months and any interest that occurs from the transaction. I've told him the APR if it categorized as a cash advance and the regular is ( the monthly prime + 10.65 % = to 13.9%) it goes back up to 17.8% end of October.
We have written up a contract that generally says if he defaults in the 4 months I give him to pay his portion of the bill, I can take him to court and hold him responsible for any fee's and interest I acquire from his portion. Maybe that sounds odd but the reason I do that is because I'd have account paid off the 18TH of next month which would be a relief but hey I waned to be a social worker for a living I do things like this...
I ask for CONSTRUCTIVE advice not "Hey that's really dumb kind of advice" like: Things I should ask for from him or things I should ask his dealership. Anything that is actually constructive and productive to this situation.
@j_casteel wrote:
Is it a friendship you don't mind losing?
I wouldn't put anything on a CC that I couldn't afford to pay myself. These things tend to go south really quick. I'm sure your friend is awesome, but you are unemployed and he seems to be having financial issues right now I just couldn't see putting yourself in anymore debt.
A cash loan to help a friend with a similar contract (if you need that) would be a better option, IMO. Unless, you could decide to help him out and just let him pay you back when he's in a better place.
@j_casteel wrote:
Is it a friendship you don't mind losing?
I wouldn't put anything on a CC that I couldn't afford to pay myself. These things tend to go south really quick. I'm sure your friend is awesome, but you are unemployed and he seems to be having financial issues right now I just couldn't see putting yourself in anymore debt.
A cash loan to help a friend with a similar contract (if you need that) would be a better option, IMO. Unless, you could decide to help him out and just let him pay you back when he's in a better place.
It's money , not my life. Sort of helpful but I could see the cringing expression. No one will break my knee caps. PROMISE
Don't loan your friends money. Whey they can't pay on time, they'll start avoiding you and then resent you because you dare to put money ahead of friendship. It changes the dynamics of a relationship as it naturally puts the lender over the borrower.
Giving him money to pay off his car is fine though. And he'll most likey repay you back in time anyway. Just leave it at that.
And, suffice it to say, you live in a weird town when the mayor takes personal interest in who works at the local gym.
It's your money/credit so you can really do as your please with it. Is his credit bad? It can't be that bad since he has a car note. Most credit cards, even cap 1 beginners, have a 0% interest offer for ## months. Why doesn't your friend just open up a card and pay for it on that? He could stretch his car note balance over 12 months with 0% interest if needed.
That being said, I understand you are trying to help him, but to be honest, your really making him pay more for his car than what he has it financed at. Interest on car loans is computed at the initiation of the loan. Whether you pay it off a day after you get the loan or you pay over 6 years, you still pay the same amount of interest as agreed on the loan. They are not computed the same as credit card interest which is compounded daily.
BTW, dealership payments are not considered cash advances so it wouldn't be considered a cash advance.
In the end, it is probably better to let him finish making his payments on his own or try opening up his own CC account with a 0% intro and use that to pay off the remaining balance if possible. But, if this is really the only option you two have decided is possible, be ready to be able to pay it off by yourself because should something happen to him, it is your credit that will be affected. Sure, you can get him in court to get the money back, but you will likely have to get it paid down by the time you get everything through the court system, get a judgement, and get paid by your friend.
