Could I write a legitimate contract stating that if I lend money to someone that they must pay it back?

Question

Let me get into some detail here first. A friend of mine would like to borrow $2000 from me to buy another car for himself. I'm hesitant because that kind of money is an investment. He plans to pay me back monthly over time but I need to know if I could write a legitimate contract stating he must pay me back the money no matter what happens. Could I just write a contract myself stating that he must pay back the money where he must sign to make it official? Or would I need to hire a lawyer to take care of those procedures? Thank you.

Answer 1

I had a similar situation and you can write your own contract. Besure to state the amount borrowed and exactualy how much he will be paying back monthly and what day of the month. Also state in it that if he defaults you have the right to collect the money in an appropriate way such as civil court. Make sure the contract is clear and make sure it states everything. after both of you are in agreement with the contract both sign and have a original copy for both of you. Getting a lawyer would really waste time and money, a contract written and signed by a lawyer will be no better in civil court then a civilian written and signed contract

Answer 2

You don't need a lawyer, write up the contract, setting up the details, the person's name, address, phone, social security #, parent's name,  amount to be paid each month, by a certain day each month.. (late fee if the money isn't received by that specified date.  Have a witness sit while you explain this contract with your friend and your friend has to sign this contract. Make a copy of the contract.  You could have a notary public witness the signing.  That costs very little.  Your contract will hold up in court.  Go to a locksmith to get a copy of the key.

This is a drastic measure, but tell your friend that if he/doesn't pay for 2 months you will come to get the car.  Also have your name on the title.  If he finds a car for $2000 you go with him and make sure your name is on the title.  

In my personal opinion, you should never loan a friend or relative money.  My sister loaned her daughter money and has had a very difficult time getting her to pay each month.  

Why can't this friend earn money to buy a car?  If he/she has bad credit, you should not loan money.  This whole situation is a financial disaster waiting to happen.