A good gesture is lending money to a family member or acquaintance. And it appears to be a trend that is spreading all over. Is lending money to a family member or acquaintance, however, ever a wise idea? While there’s no denying that it’s great to help someone in need, conducting business with a relative or friend carries a significant level of risk. When you make a financial transaction with someone you care about, it transforms your connection — and not always for the better. If loans are not paid back, tempers might flare, friendships can be strained, and family dynamics can be disrupted. Relationships can be irreversibly harmed.Visit this link to be really good at money lending in toa payoh.
Fortunately, there are some procedures you can take to ensure that if you do give money to someone you know, the money is repaid and there are no repercussions. He is invariably questioned about the finest methods for lending money to family and acquaintances. Here are some of his observations based on his many years of experience.
1. Think about the individual who is requesting money
The first thing you should do is think about the person who has approached you for a loan. Will they ask you for money again if you lend them money this time? Is the person trustworthy, possibly most importantly? Examining the individual who is requesting money is the first step in determining whether or not granting them a loan is a wise idea.
2. What is the loan’s purpose?
The second point to evaluate is the loan’s purpose. Is it consistent with your core values? This distinction will aid you in deciding whether or not to proceed with the loan. While some may see value in assisting a family member with a car loan or money to purchase equipment, others may see value in assisting a family member with a loan for a car or money to purchase equipment. The important thing is to feel at ease with the loan. It’s probably not in line with your values if it doesn’t seem right.
3. Make a written loan agreement
For a variety of reasons, verbal loan arrangements between friends and relatives might be dangerous. Expectations for a repayment plan may not be expressed effectively, and the terms of a verbal agreement may be left unclear. It is always preferable to have a loan contract or agreement written down, with clear terms of reference. Therefore these are the most important tips that are necessary to lend money properly.