Hello fellow Mustachians,
this week I found myself in a little dilemma that I wanted to get your opinions on. Here is the story:
About a year ago an old friend (we have literally known each other for half our lifetimes) asked me to lend
him money to cover short-term expenses. I was a bit shocked when he asked for $7000 but considering that
he owns the apartment he lives in, has a steady job and showed me a summary of his long-term savings
account (insurance-style so not easily liquidated) I told him that I would do it, if we set up proper paperwork.
I went ahead and downloaded the template for a personal loan that described persons involved, the amount,
due date (max. 1 year) and specified an interest rate of 5%. We both signed the document and I wired him
the money to his account, all good. That was 10 months ago.
Fast forward to this week and he texts me that he would like to repay me. I send him my bank details (which
were in the contract) and he wires me the money back. $7000 are back safely in my account. However, he did
not add the interest (roughly $300) to that repayment.
Here is my question: Should I insist on him paying that interest?
I did not lend him the money to collect the interest (there are certainly better ways to make 5%) but wanted to
make sure that it is not considered interest-free and gets the lowest priority. The contract is very clear that I am
entitled to the interest. On the other hand we have been friends for a long time (15+ years), he has his second
baby on the way and has repaid as agreed. I don't really need the $300 either but it's a little too much money to
simply leave on the table. If it would be $50, I would just forget about it. If it would be $500 I would definitely
ask for it, but $300 is right in the zone where I am not sure what do to.
Thanks for any input :)
Lordy