Tender, Loving Credit


Tender, Loving Credit
Protect yourself from the stress of lending money to loved ones.

To me, this sounds excruciating. You might as well say it straight out: “I love you, baby, but you’re a loser; your future looks iffy.” Or how about, “Darling, I would never leave you—as long as you sign here and don’t miss a payment”? But the point is to separate the emotional ties between individuals—which can exist as beliefs and longings and surges of affection—from the monetary ones, which are expressed as amounts and timetables and quantifiable obligations. They are two different connections that must exist as two separate realities. Writing out an agreement as a promissory note, including dates and interest rates if you want to charge them, will keep those ties from crossing and snarling.

Asheek Advani has created an ingenious system to make these transactions less awkward. His company, founded four years ago, offers a cheap, easy way to take the love out of lending, without being heartless about it. When someone hits you up, you can say, “Sure!” and send them to Circlelending.com. There, a combination of web pages and phone calls with a Circlelending staffer will provide options for structuring the loan. As a third party, the company will establish amounts, interest rates, and most important, a payment plan. It will even make automatic withdrawals and deposits, so that a deduction from the borrower’s bank account—every month, or quarter, or year—gets electronically transferred to the lender’s. “A piece of paper may get you clarity on amount,” says Advani, “but it’s the repayment plan that matters.” Circlelending even tallies up the fees for late payments and works out a new schedule if things go haywire. And the price is sweet: After an initial fee in the hundreds, you—or your borrower—pay nine bucks a month.


In short, mixing money and friendship can be hell, sort of like dating the boss. Which is not to say that it can’t be done. Blair lent each of his two brothers more than $10,000 at different times, with no formal arrangement at all, and he got every bit back. Liz L.,who used the Circlelending solution after years of tension with her indebted dad, rescued both her credit cards and the relationship. Another woman who loaned her poverty-stricken lover a tidy sum, never expecting to see the money again, got a check in the mail a year after their breakup. “It was like found money,” she says happily. “It reminded me what a really great guy he was.”

Just don’t be a financial fool for love. You may think you’re immune to pettiness, but nobody, as far as I know, has found a vaccine for resentment.