There may arise situations and problems in everyone’s life where they are in a financial crisis and are out of money for their needs. In that case, they are in a need to borrow or arrange some money from somewhere. The first person that comes to mind is their close ones. They might be their family members or their friends. Therefore, you must be the one to lend them the amount they need so that they can continue their work. Below are the ways of how and why should you lend money to your family or friends:
1. Low Interest:
If you are lending money, you will obviously take no or a very little amount of interest from them. Banks charge a greater rate of interest on loans. Thus, it becomes a better source of loans. Moreover, if you do not have enough money to lend to your family or friends but still want to help them in getting out of a financial crisis, you can do it by being their guarantor. There are instant guarantor loan given to the people who are in need of money which is quite an easy process.
Trust is the key point to everything in life! If you know your family member or your friend well, only then you should lend them. It will ensure that your money will come back and they will not betray you in any condition. Else, if you do not trust them, you should think twice before lending them. In most of the cases, lending money to family is trustworthy.
Your assurance about lending them can be also determined by knowing about their income. If their income is not so good and is in bad condition, then you have to measure the pros and cons before lending them. On the other hand, if they are earning well, then lending them is not a bad idea since they are quite reliable. Therefore, knowing everything about their earnings before lending can give you a better idea.
There might be a reason why they are asking you to lend some money. Whatever it is for, you should sit and discuss it prior to lending. This will ensure that they are really in need of that money and how serious they are about the amount which you are going to lend them. It will also brief you about their repayment plans and ideas.
5. Repayment Term:
If you are ready to lend them money and are sure that they will pay you back, you should discuss the repayment and after what period of time will they be able to do so. This will make both of you clear about when the repayment is going to be done. Else, there might be chaos from both sides regarding repayment of the amount. Hence, one shall discuss everything prior to avoid any kind of confusion or argument after lending them the money.