Borrowing Money in Another Country

[thediceman]

The money they lent you cost them £800. You pay them back £600. They lose £200 on the transaction. Simple. But who cares if they lose out doing you a favour, as long as you save a couple of hundred.

[gatso]

The money they lent you cost them £800

this is obviously the important point in this discussion. if someone went to a cashpoint and withdrew money from from their uk a/c using a us atm purely to lend me the cash then I would agree that I'm effectively borrowing £££ and they should be repaid in £££ later on

if however I'm borrowing from their huge wad of $$$ that they've won on the craps table then I'm borrowing $$$ unless we otherwise agree

[StuartHopkin]

let's say you borrowed dollars from a spaniard and then the pound strengthened a lot against the dollar
and the euro while the euro strengthened slightly against the dollar

are you going to pay him back in

a) pounds
b) euro
c) dollar

I neither borrow or loan money but if I did I would clearly set out the terms at the beginning.
If the terms were not set out at the time and then the lender is willing to exceptt the money in $ then fine but as for this thread this wasn't stated as an option, it's about what exchange rate should be used, the one at the time the money was leant or the current favourable one.
I would ensure that the person who had done me a favour would not suffer any financial loss. 

If I use today's rate then they don't suffer any financial loss. Nor do I.

If I use the rate when borrowed then they gain money, and I lose money. Or if the rate had improved then they lose money and I gain money.

At the start I borrow $1000.

If I use today's exchange rate I pay them back £600 = $1000.

If I use the rate when borrowed then I pay them back £800 = >~$1330. They've gained $330, and I've just been hit with a daft amount of interest.

What does £ have to do with anything? You didn't borrow £800, you borrowed $1000.

What about if it was a quarter of a split pot that wasnt noticed at the time, but by the time it was the $3 your mate now owed was worth £1.90 not £2.00

I dont think you would be very happy Charles!

[StuartHopkin]

I dont know how this has reached four pages.

I do this all the time and no one ever questions it.

Whilst away if they pay me back I will accept the same in the currency lent.
When back they owe me exactly what it cost me to get it.

If both of you usually use GBP then you owe him what it cost him in GBP.

[EvilPie]

What does £ have to do with anything? You didn't borrow £800, you borrowed $1000.

This is fine if they had no intention of converting the $'s back to £'s. If they would've changed those $'s back when they got home then you have cost them £200. If like Gatso says they have a big wad of $'s in cash that they weren't going to change back but instead were keeping for their next trip then there's no problem at all.

[david3103]

How would OP feel if they had deposited $1000 into a poker room at a cost of £800 and then been told some months later that despite their having increased their roll to $1500 they were only getting £900 back because the exchange rate had moved?

[Cf]

If you're going to treat it as a £ loan then that's fine. You need to say at the time though that you're lending £800 (which just so happens to be $1000). Gatso's example of using a cash machine to get the money fits this.

If you've just lent it as $ though with no mention of converting it back into £ then it needs to be paid back at the $ value, meaning one of you is gonna have to get hit by the exchange rate changes, whichever way they go.

[EvilPie]

If you're going to treat it as a £ loan then that's fine. You need to say at the time though that you're lending £800 (which just so happens to be $1000). Gatso's example of using a cash machine to get the money fits this.

If you've just lent it as $ though with no mention of converting it back into £ then it needs to be paid back at the $ value, meaning one of you is gonna have to get hit by the exchange rate changes, whichever way they go.

But good luck borrowing money again if it happens to be the lender who gets "hit".

[kinboshi]

I dont know how this has reached four pages.

I do this all the time and no one ever questions it.

Whilst away if they pay me back I will accept the same in the currency lent.
When back they owe me exactly what it cost me to get it.

If both of you usually use GBP then you owe him what it cost him in GBP.

How many camels would he get for that?

[77dave]

I have spent a lot of time in the Uk recently and a friend of mine has been spending time in the US.

We have been borrowing money back and forth from each other to save on exchange rates and on commissions.

At times the amount borrowed has become a large amount.

We agreed an exchange rate at the beginning and all monies were to be exchanged at this rate.

If we hadnt agreed a rate then i would expect to pay back or recieve back at the exchange rate of the day of return

[Royal Flush]

Just lol at this thread, these must be the same people who go through the itemised bill at dinner to work out who owes what.

[NigDawG]

The money they lent you cost them £800. You pay them back £600. They lose £200 on the transaction. Simple. But who cares if they lose out doing you a favour, as long as you save a couple of hundred.

as others have stated, the money they lent was not £800, it was $1000, so you pay them back $1000. if they want that in £ thats fine, but its still $1000 i owe so it would be the equivalent.

tbh don't think anyone saying the same thing is doing this to 'save a couple hundred'

[NigDawG]

Just lol at this thread, these must be the same people who go through the itemised bill at dinner to work out who owes what.

lol flipping/credit card roulette is the only way to go obv

[EvilPie]

Just lol at this thread, these must be the same people who go through the itemised bill at dinner to work out who owes what.

"But I didn't have any of the table wine so why am I paying for a share of that?"

[thediceman]

Anybody fancy leading me a few thousand, I'm not fussy what currency. I will pay you back as soon as the currency rates are in my favour, apologises if anybody loses out as a result.

Cheers in advance for the flood of pm's offering me the money.