Factors to Consider When Lending Money to Friends and Family
Lending money is a thing that some people will be doing. You need to know though that it is this one that might be different when friends and family will be borrowing. Once you want to know how this is done then keep on reading this article.
The first thing that you will need to do is to pretend that the loan is a gift. It is common to see loans from friends and family that can get unpaid. It is this mindset that you will need to have to have yourself from any anger or disappointments.
Make it a point that you are able to charge an interest. It is this one that you are doing to help them. And that is why you don’t want to discount this one during the repayment.
It is also important to draw up an official agreement. Having negotiable instruments is a thing that you will need to do. Whenever it is this one is what you are able to do then you can avoid any argument later on.
If it is you that will be enabling the borrower then it is important not to lend them money. Once you determine that they are financially irresponsible then lending them money is not a good idea since you are only enabling them to be one.
It is you that will have to say no to loans that will have no due date. When providing loans then it is important that you will know when it will be repaid. And once you will not set any due date then the repayment will be the last priority of the borrower.
Another thing that you also will need to do is to not lose sight of the relationship. You need to remember that relationship is important with your friends and family. It is because of this very reason that you don’t want to lose sight of the relationship. It is the relationship that you have that is more important than money.
Finding other ways to help them is also another thing that you can do. Make it point that you will see if there are still other ways that you can help them aside from lending them money. You need to remember that lending them money should be your last option. You need to look at any other way to help them.
Lending then money more than you can afford is a thing that you should not be doing. Getting your money back is a thing that might not happen and that is a possibility. See to it that you will not be lending them money more than you can live without. Before lending money to other people then see to it that you will be looking at the finances that you have first.