It is always essential to keep all factors in mind before you lend money to anyone. Especially, when you are lending your money to friends or relatives, you have to be more cautious and open to conversations. When a friend or family member asks to borrow money, contemplate about why they're asking you and not someone else. It is important that you see the credit line and your profit margins before lending your liquid cash.
Here below we have some critical factors that you can consider before you lend money to friends or relatives:
>Figure out if you can afford to help or not: Don’t loan money if it will leave you in a monetary predicament. It doesn’t make sense to lend a hand if that means you’ll have trouble paying your bills and making ends meet.
>Prepare for the option you’ll never see your money: Lending money to friends and family sometimes might go as bad debts. You will have to be comfy with the fact that you may never get your money back. That’s why it’s important to make sure you can afford to lend. If not, your compassion will hurt you in the long run.
>Be clear about your prospects: Lure up a payment plan before lending money to your friends or family. You can create a loan schedule and discuss what will happen if something goes wrong before giving money as loan to your close ones.
>Deal with difficulties right away: You may feel you're being kind by not planning to send any reminder for past due, but you're just setting yourself up for trouble. Let the borrower know you're keeping track before lending the amount to safeguard from any debts in the long run.
So, keep the above factors in mind before lending any amount to your friends or family.