Reader question: Thai neighbor wants to borrow money from me, to do or not to do?

Roy, don't do it yourself. Let a Thai do that. I wonder if you can lend and if you will be looked at later on that idiotic interest.

Don't want to lend you, and I read that a bit, keep her at a distance: 'that is a lot, I have to think about that, I also have a family, I have family in .. country, I have to save for car-roof-doctor' etc.

If you lend, the fanfare goes around and they think there is always something to get from you. However well that lady may mean it: keep your distance.

says.almost always.
Living on a budget, what if I don't get it on time?
What can I do, no one can help me.
So don't lend it out.
HvM

If I am not mistaken, you are breaking the law if you – as a foreigner – lend money to a Thai.
So a risky business.
Apart from the risk that you will not get your money back.
Your neighbor has no money now and next month either.

Apart from that, I would be ashamed to want to receive 3 percent interest per month.

The question of whether you should lend money to a neighbor is actually just as difficult to answer as that you politely explain to your neighbor that you would rather not do so.
Even with the high-interest agreement, it does not give you any certainty that you will actually receive the 3% interest p/m and the repayment of the principal sum of 40.000 Baht.
If this neighbor cannot fulfill what has been agreed, she will automatically avoid you to avoid further confrontation.
My wife loaned a Niece of hers a few years ago a mere sum of 5000 Baht, which she agreed to pay back after 12 months without interest.
When my wife still hadn't got the borrowed money back after 2 years, she carefully asked why the niece had remained in default here.
The result of her question was a fierce indignation how she, as a woman married to a wealthy Farang, could be so impudent as to still ask for this money.
Although I had nothing to do with this loan myself, and my wife actually had every right to inquire of this Cousin, this Cousin is now suddenly playing the offended, ignoring both of us when she sees us.
We have become very careful with loans, and prefer to avoid any request, but it is up to you.

We never lend money. Lending money disrupts relationships. If you say no, is it unpleasant for the other person. If you say yes, it will become unpleasant for you if you cannot/will not be reimbursed, or if you ask for more later. If you want to help/support someone, donate a modest amount after explaining what the money is for. Don't be disappointed if a different spending is nevertheless chosen.

Do not. if she doesn't have money now, she probably won't have money to pay you back.

I know people who lend money at a hefty interest rate, more than 3%, they ask for their bank card and code as a pledge and empty the borrower's rejening every month. The lender takes his share and gives the rest to the borrower.
This way he is always the first to receive his monthly repayment.

To borrow means to give in Thailand, and trouble follows.

May I be so bold as to advise you not to do that.
If you are willing to support someone by making a donation then ok, you do that with your heart and the stocking is done.
But borrowing, and especially being offered a (high) interest for it, is always suspicious in this country.
Thais make it quite easy to want to borrow money, but… and believe me, you will never see that money (let alone the interest) again. Their hundreds of excuses are already in the back of their mind from before you give them the money only to keep putting it off and finally let it fade out endlessly with nothing to see.
A Thai will never think in advance whether he can repay the borrowed money, that does not occur to him (or her) at all.
And certainly if the money comes from a farang, they have too much money….

Better to say that you are a bit tight yourself and can't lend anything now, that's what banks are for!!
Borrowing is giving in many cases and ask yourself why do they have to borrow?

I thought the official percentage per year at which you can give a loan is 17% anything you ask for more would be seen as a criminal offense especially as a foreigner so I would be very careful but they might has already taken a loan elsewhere, of 10 or 15% and then that 3% is quite a relief for her, but I would not break the law, let your wife do it do you really want to help her and then do it for that 17% on an annual basis and put everything on paper.

Very short: DON'T. Say you're not a bank.

Dear Roy,
It is tempting to lend your neighbor money. After all, she is such a nice person, she is trying so hard and life has become a torment for many due to the Corona pandemic.

It is also very sad/sad not to lend her the money. He is such a nice person, etc. etc.

Since the outbreak of the pandemic, I have spoken to many who no longer know how to pay their bills. Who don't know how to get a job and earn money. Every day I speak to someone who, together with friends and relatives, is treading water to keep their heads above water. It always amazes me how they seem to do that. (????) And keep it relatively laconic.

My approach is relatively simple:
1. I don't lend money to anyone
2. If I know of someone (that I know) that he/she is having a hard time, I will buy/rent something from them so that they generate income.
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3. I give the money, knowing that paying back is an almost impossible task for them. And it often takes a REALLY long time before they are able to do that. In doing so, they usually fill one hole with another, so that borrowing only exacerbates the problem.

Once out of your wallet, forget about the money and see it as your good deed for the day.

Finally: 40.000 THB is a LOT of money for them. At the current exchange rate for us less than € 1.100
But it's still a lot of money. Your wallet determines the amount.

Good luck with your decision making after ALL the good/well-intentioned advice.

Glenno

I read here a number of times from reactions that a foreigner is not allowed to lend money to a Thai, but where does that say. And what about when a Thai son-in-law borrows money from you, is that allowed?
I myself never lend money to others, with the exception of my Thai stepson and daughter, who pay it back properly and of whom I know for sure where it will be tendered.

Jan Beute

I've had my lesson too. A Thai couple, who was advised to me by a Thai friend during a court case, turned out to have advised me in such a way where they received an advantage (commission). And the advice turned out to be wrong. The wife of the couple, in tears, came to ask me for a loan, when I still trusted them. Her best friend had been tricked into buying and financing a motorbike and was now in prison. She now had to take care of her friend's 2 children. A few months later she again had to pay me money because her son had impregnated a girl from a good family. And that too was another personal drama for her. When the time to pay back came, she again asked for a loan because the Russian mafia had her in their grip. I had learned my lesson. She is now completely out of sight, gone, without a trace. The Thai lady in question had a drinking problem, which could not be overcome. Sad.