Lending money to a family member or friend can be a mocking task. It goes without saying that money can cause problems and solve all your problems in the same way. In this context, financial implications often ruin relationships with family and friends. This is the reason why most financial experts advise against borrowing from a family member or friend. After all, you have no guarantee of having your money back. However, there are some strict but helpful steps you can take to help your family member or friend get out of a difficult financial situation without ruining your relationship with them. As has already been said, lending money to a family member or friend can be a daunting task. That`s why it`s important to be aware of the impact. Before you start borrowing the money, you need to observe the following.
If you plan to lend money to your child who is married or married in a common-law relationship, it is important that there are sufficient documentation that the money made available should be treated as a loan. Documentation may include: the duration of the loan, including the start date and the final repayment date If you are looking for a loan, the solution may be closer than you think. Borrow money from friends or family and pay them the interest you would normally pay to a bank. In order to avoid such adverse effects (on relationships or finances), it is good to first think carefully about the granting of the loan, and then formalize the terms of the loan and repayment agreements in a written agreement. 2. Agree on a rate of return with them Friends and family rates start at 0% or add some interest if your loan comes from their savings. As a rule, when offering credits. You should only lend the amount you can afford to lose. You shouldn`t avoid breaking the bank on the money you`ve saved for your college fees.
Whenever two friends or close family members have to borrow together or do business, there is always a risk to the relationship. It`s understandable that you want to help them because you`re taking care of them when it comes to some kind of credit for medical bills, when your heart naturally says to help. But you are now in a situation. If you find that you have to stalk your friend every month to get a payment, and he`s not as sincere as you initially thought, the relationship can be damaged. You start to take a different perspective on that person from a business perspective. This can cause considerable damage to a relationship. And of course, there are payments. While friends or relatives who invest in your business understand the risks, you should never take credit for granted. “Don`t be more careful when it comes to paying the money back,” McKeever says. “This kind of attitude could ruin the relationship.” Finally, if you decide to borrow the money, make sure the agreement is written. Also make sure that it is signed by both parties.
When the loan was originally applied for and you agreed to the terms, you knew that the situation had the potential to become negative. Even if you`ve sued your friend or family member for their loan, you may still not receive everything that was originally borrowed. If there is no written agreement on the credit, you cannot get any of the credits….