A loan Between Family Members or Friends Is A Trap.
Bringing emotions to financial journey is one thing that most people have witnessed. It's one of the costliest mistakes I would advise you to put on check. But no, I didn't mean to create any sort of enmity between friends and families. We're only talking about money here.
Don't be tricked most times by the suggestions of you emotions, thereby rulling away practical truths. If you want to read more about this topic, checkhere www.investopedia.com.
You could have dinner, gifts and support them as you can, that's pretty fine.
Giving them money is cool; and if you should do that, then let it be from you to them with no attached payback mentality.
Generosity is still a great quality we all should encourage and give a lift by every possible means. But when it comes to giving loans between your family members and friends,
Bro, sis, don't.
You're Not In The Right Position To Give Them Loans
following the right judgment in doing stuffs, especially money related stuffs should be part of your concern. This is to avoid potential fall out with any person.
It's always fine to understand why we need to say yes or no to requests. You're never a bad person by saying no to a request that isn't there for your good.
If such a loan request could get your money trapped, don't you think it's not for your good?
How do you avoid this?
Maintain your ground on "no" if truly you're on its side. Don't sabotage your conviction that says "no" by being unstable to your belief.
Avoiding imminent issues is better than allowing it happen, then seeking a way to solve it becomes an energy that was never needed in the first place.
It's common part of what could come your way--- I mean being asked for a loan by a family member or friends. Sure it's. The approach you adopt in dealing with such a simple-look challenge is what matters.
Firstly, listen to them respectfully and with compassion. Yes they deserve the respect. But then, learning how to approve or not approve it should come in handy.
The truth is, they can come to you because they really face financial challenges. So coming to you to see how the financial burden on their shoulders could be lifted ain't a bad one. After all, we're here to watch the back of one another.
Let me tell you what could be your very first time to come across;
The tendency of loans given to friends or family members to be trapped is very high.
Loans go with interest of a particular agreed percentage, right?
How would you deal with that?
What about the collateral?
I repeat, definitely, you're not the right person to give them credit facilities.
Help them solve their financial challenges at the best of your financial ability. Give them without asking for anything in return. That's humanity project. We do it for most people at times. Of course it's good.
But if they really need loans, then I suggest they should approach banks with their agreement well documented.
One common thing that kills businesses, finance and entrepreneurship journey is incorporating them with emotions. Let your insights, dream and vision take the lead. And leading here depicts not giving in to any emotional manipulation. Be in charge!
Family and friendship should be out of your dealings, unless on a partnership. If not, be in full control of your finance and businesses.
What matters is the approach with which you do this. Love and respect them but, don't waste your efforts on emotions or validation.
Things To Look Out For If You Give A Loan To Them
* They're aware you might not be strict with the terms and conditions. Of course loans come with collateral and interest. Mainly the above duo is to protect the money loaned and ensure prompt compliance with the agreement. In such a situation, you as an individual friend, brother or sister might be lenient to follow the process strictly, and they're aware.
* They Might not pay the interest accrued. Collateral could be forgotten.
* Outrightly, they may not repay the capital loan. Yes, and when it happens, you might likely not take actions. Again, they're aware.
* You might not have the boldness to ask them for collateral or interest.
* It could dent your image and severely put your relationship or friendship with them in jeopardy. Avoid it.
* It could possibly lead to a fight or legal action.
Any above issues could possibly happen.
Protect your love, relationship or friendship with them by not engaging in such a deal. Be their keeper if you can, but don't be their banks.
Have you given a loan to a family member or friends all your life?
How did it go?
