When you have got friends, a question of borrowing money will arise sooner or later. Every one thinks in a different way. As they say, we agree to differ. There is no right answer to this question. Though, the most common thought sounds like: “If you want to loose a friend then lend him/her money”. Let’s consider this situation from some different view-points.
Such situations depend only on relationships you have with your friend. If you are absolutely confident in your friend and his credibility, then you may borrowing some money is okay, it’s up to you. If it’s really a friend of yours then you should know if he/she has a source of income and able to pay back. Is it possible to lend money to a friend and not to loose friendship? Hopefully in this article you will find the answer.
Interest Rate on a Friend Loan: Set Up Or No?
Here you have just two options available: to set up an interest rate on a loan or borrow money without charging any interest. Nevertheless, if the loan you provide is going to be for a big sum of money and for a long period of time, then it’s totally okay if you will inquire some interest rate. It will make you interested in lending money and your friend will be offered lower rates than in banks or other lending institutions. Furthermore, as friends you can always negotiate.
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Define a Deadline
In case you’ve made decision to help a friend financially, then it’s necessary to set up a deadline. A short-term loan usually does not require any additional divisions of payments as generally the sum is not big and essential. If a loan tends to be a long term one, then it’s necessary to set a repayment schedule, it will be convenient for both of you.
Make Loan Terms Understandable for Both Sides
A basic contract while obtaining a loan consists usually of some conditions which both sides agree on. Include a sum of borrowed money, repayment terms and the interest rate if needed. Check whether this document is signed by both partners, witnessed by a third person and the contract has a date. Keep the original in a place that you are aware yourself.
If Your Friend Can Not Pay Back
Life is totally unpredictable and therefore, you should discuss a possibility of inability to pay off. Make up a monthly repayment plan and try to follow it. In case your friend can not pay off the loan you should discuss it and think what you can do. Maybe your friend can provide you some service or a favor, make be he/she sells something and can offer you another kind of compensation.
Nonetheless, in case you can not or just do not want to borrow money to a friend because that this may ruin your friendship or due to any other reason, then suggest him/her an alternative option. It’s possible to get some cash quickly with a help of payday loans lenders, there’s no need to provide lots of documents and the process is easy and convenient. Anyway, before lending money to a friend of yours, think well. It’s up to you, but keep in mind that a loan may affect your friendship.
Guest Post by Mila