Should you lend money to family and friends?If a family or friend is struggling with money, struggling in a financial emergency or is finding it difficult to get access to funds due to having bad credit, you may be asked if it is possible if you can lend them money. However, as we all know, the subject of money can quickly become a source of tension if the situation is not dealt with correctly, leading to ongoing feuds, that sometimes end up permanently damaging a relationship. Understandably, this can make you feel nervous about lending money to family and friends when you value the relationships you have with them. So should you borrow money from others close to you? Here at Payday Bad Credit, we explore the different things you should consider if you do, as well as the other options that can be considered if you decide not to. It is always imperative to remember that ultimately there is no right or wrong option. If you choose to not lend money to family and friends, it is your money, and therefore it is entirely your prerogative to do with it as you please. You should never feel pressured to give money if you do not feel comfortable in doing so, or if you are in financial difficulty yourself.
Set clear boundariesIf you have made the decision to lend to a family member or friend, you should set clear boundaries from the very beginning. In many cases when it comes to lending to someone you know, the disagreements start to arise as a result of assumptions made. For example, the borrower could think that the money is a gift and doesn’t need to be paid back, or they have a considerable amount of time to pay the lender back, whilst the lender believes its simply a short-term loan. To avoid confusion, it is important to set clear boundaries:
- Explain clearly the terms of the loan – and that you want to be paid back before giving the money
- Talk through together about a feasible repayment plan
- Talk through about a cut-off point in which you expect to be paid back in full