Once in a while some of us get trapped down by cash, which makes us think of lending money from a friend. A little bit here and there to cover one or two financial issues, it may be a huge amount of money.
Though it’s not a situation anyone likes being in. This write-up will guide you through the steps on how to borrow money from a friend without breaking the relationship.
First and foremost before you ask anyone to lend you money, make sure there’s nothing you can do to solve your financial problem on your own. You can think of what you could sell that you wouldn’t really miss, like luxuries you could go without for a while.
You also need to figure out how much you need. Don’t just guess. Use whatever information you have to come up with an exact figure. If you ask for too much, your friend might decide that he or she can’t afford it. Ask for too little, and your risk having to go back and ask your friend for more money.
Explain your situation to your friend. Be honest. Tell him or her reasons you need the money and how much you need. Preferably, you should also be able to show your friend that this is a one-time loan and that you won’t be back in six months asking for more money. If the situation was something unexpected that you had no control over, like losing your job suddenly or a medical emergency, this should be easy. If you got yourself into this situation by buying a lot of unnecessary stuff you couldn’t really afford, you need to tell your friend that you realize you made a mistake and have learned your lesson.
Discuss the terms of the loan. You should already know how long it will take you to pay your friend back. Make sure that both of you are comfortable with what you agree on. You should be able to pay the loan back in the time you agreed to without ignoring your other financial obligations and your friend should have the money back in a timely manner.
Experts say you should have a plan for what happens if you miss a payment. Though you both want to keep this from happening, it’s much easier to discuss it beforehand than to deal with it on the spot if it actually happens. You could agree to extend the payment period once, pay double when your next payment is due, spread the missed payment over the remaining payment dates, or something else that you both think is fair.
Also consider offering to sign a contract. Your friend may say it isn’t necessary, but it will help to show that you’re serious about paying back the loan. Make paying back the loan a priority. After you’ve taken care of necessities e.g rent/mortgage, bills, food, and what have you.
Immediately put aside the money you owe your friend.
If you’re going to miss a payment, deal with it right away. If you and your friend already agreed on what to do if you missed a payment, stick to what you agreed to. If you didn’t discuss late payments when you agreed to the loan, talk to your friend right away. It’s not fun, but you owe your friend an explanation. Say what happened and how you intend to make up for your missed payment.
Thank your friend for helping you out. Do this when your friend agrees to give you the loan and when you’ve finished paying it back. Remember that your friend is doing you a favor, so show him or her that you appreciate it.
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