Friends and acquaintances often turn to us for financial assistance. And sometimes we ourselves have borrow. If this fact cannot be avoided, then the following rules can be used. Like any loan, debt relations between people are built on the principles of:
- Even if you borrowed without interest, somehow you need to thank in material form for this: good wine, present, evening in a cafe and more. The scope depends on the amount borrowed (and returned) and / or the scale of the problem solved by this;
- Monetary debt is like a card debt: if you don’t give it away, burn in hell. Seriously, you should always pay off your debts. It is a matter of respect and your reputation;
- When lending, make sure that in case of unforeseen circumstances the borrower has the resources to fulfill the second principle of repayment: bank deposit, car, apartment, business and so on. This is important when it comes to large amounts;
- Debt must not only be repaid, but repaid on time, since money has a value over time.
Now consider the situation. So, if you lend, you need consider not how much you can, but how much is left. It makes no sense to give the last, of course, if it is not about life and death. You can use the rule: give no more than what you can get back in a year.
Should I lend money to my friends?
If you lend money, you must first compare the effect that you get from such a loan, with the risks taken. It is worth it?With this approach, in the worst case scenario, when nothing is returned to you, two events will occur: in a year you will restore the status quo for your finances and you will lose a friend.
If you borrow, then in this case you must first compare the effect that you get from such a loan, with the risks taken. As for the amount, here you can use the rule: do not take more than what you can safely accumulate over the year. According to statistics, 10% of our income is our “minimum balance”: it is added to deposits, it is deposited unspent in our pockets, wallets, on cards and the like. That means you don’t need to borrow more than your monthly salary. With this approach, you don’t even have to tighten your belt to accumulate the necessary amount and pay off your debts in a year. And keep the friendship.
This is about the financial aspect of borrowing money. In fact, the question that you should consider when thinking of “give – not to give” or “take – not to take”, for the most part concerns morality: are you ready to lose this person as a friend if he does not lend you money or you lend him will not return. In such a situation, financial accounting is secondary.
Make your peer-to-peerloans safe and documented
It is fundamentally important, in order to exclude the possibility of contesting the loan contract for non-cash, to reflect in the loan contract or receipt the fact of the transfer of money by the lender to the borrower and indicate the obligation of the borrower to return the funds to the lender in a certain amount at a certain time.
In a situation where the deadline is not determined, the borrower’s obligation to return the money will be deemed to have come after seven days from the date of demand. In a situation when an agreement is concluded (and not a receipt), it is advisable to indicate in it that it is an act of acceptance and transfer of money in order to exclude the arguments of an unscrupulous borrower that the submitted agreement is an agreement of intent.
If only you have a chance to avoid peer-to-peer loans, do it! It is much better to turn to a convenient service of lending companies and get some cash for a short while instead of risking to lose a friend. Online lending is quite popular in the UK and other countries around the world. It gained its popularity due to convenience and fair terms and conditions.