Borrowing money from friends

Loan money to friends! If you find yourself without any money you could consider borrowing money from friends, but there are rules to follow so you keep your friendships strong and even strengthen them. Loans from friends should be your first option if you have a bad credit rating, no money in the bank, if you need money to pay the rent or even just to pay for groceries. Borrowing from a friend can be one of the cheapest loans out there, but it is not the only way to get out of financial trouble. There are opportunities to start a business without any money at all which are an excellent way of getting out of a financial quagmire.

Borrowing money from friends

Borrowing money from friends: How

Borrowing money from friends is much a complicated matter and in order to make it simple here is a checklist that outlines the most basic rules of engagement including social norms, how to protect your friendship and how to make it more likely for the transaction to go smoothly.

Transparency is the key. Friendships can end when loaned money is not repaid and the debtor stops all communication. You must always be honest and come clean if you are still having financial difficulties. It is only fair and respectful to your friend who has done you a huge favor by lending you the money in the first place.

Borrowing money from friends: ask yourself these questions

  • Is your friendship going to be destroyed if you don't pay back the money?
  • Evaluate the level of friendship. Is this a friend who won’t feel put out by my request?
  • Be very honest with your friend about what the money is for, how much money you need and when you can realistically pay it back.
  • If you are struggling to pay back the arranged rate of repayment, tell your friend. Your friend is most likely to be understanding and may agree to reduce the repayment rate, whilst your finances pick up.

Borrowing money from friends: ask your friend these questions

  • What is the money for?
  • How are you going to pay it back?
  • Have a proper plan to pay it back, calculating your future expenses and forecasting for the extra expenses due to the loan.

Borrowing money from friends: the procedure

Borrowing money from friends

Borrowing money from friends: Why

Is it just because you want to buy some booze or even weed to party? Or is it to get you started with a new business? It's good asking yourself if your friendship is worth it. Also, a person lending money to a friend is much more likely to lend money if there are good reasons and if the money will genuinely help someone build a better future for themselves.

Does borrowing money from a friend damages friendships? As long as you have a "borrowing money from friends contract" you should be fine either way, as the contract suggests that at least some thought has been put into the matter and a real adult-to-adult conversation was attempted to know the real.

The rules of engagement when it comes to borrowing money from friends are simple: make sure you have a proper and viable way of paying back your loan, use a calculator to find out how much interest you will pay, get a sample letter of borrowing money from friends and find a place to get the loan notarized.

Borrowing money from friends: a personal story

Only twice I lent a considerable amount of money to friends. With one person it was clear from the start I wasn't going to be paid back within a short time frame. His wife was pregnant and he didn't have a job or other forms of income. so we decided that he could start paying back when he would start making money again. With an expectation of that happening within a year. After that payment would occur within capabilities. At this point the loan is almost paid back, with regular monthly payments of about 100$.

With my other friend I didn't make clear agreements. He said he would pay me back within 2 weeks. Two weeks later he had stopped his temp job and wasn't able to pay back. We used to hang out regularly, almost weekly. Not since I gave him that money. Two months later he paid back 100 dollar. No clear plan of when and how I'll get the rest of it back.

Borrowing money from friends: a second personal story

London is one of the most expensive cities in the world and I worked and studied there for two years. Over half my wages were going on my rent and the tuition fees for my course was £10,000. It was a teacher training course at a private institute and so no government student loan was available. I had to pay it all the tuition fees by myself. Despite having an overdraft of £2000 I still found myself in January of this year in dire straits of how I could afford to pay the next installment of my school fees which was £1050. My parents were not in a position to able to help me. Money is such a delicate subject. You don’t want to put anyone in an uncomfortable situation by asking and you don’t want to run the risk of ruining a friendship. For many people, it is a question of pride. With the payment of my school fees due in 10 days I wracked my brain, thinking of other people I could ask, who may have that kind of money to spare.

Some friends replied that they may have been able to give a few hundred pounds, which I knew would have been at their own sacrifice, given their own financial commitments. And so I pondered more and more on who would be able to help. Then a friend came to mind, who I had known for a few years, who was in a very well paid job and who did not have any children. I wrote him an email to explain my situation and to ask if he would be able to lend me the money. To my relief he said yes and immediately transferred me the funds. We arranged a monthly rate at which I could pay back the money, without any interest rates. I felt a huge weight had been lifted off my shoulders and that I was able to breathe and sleep a little more easily.

My friend lent me the money because he knows I am honest and reliable. He also knew that my financial difficulties had arisen because I was investing in my education and therefore improving the quality of my life.

Having financial difficulties is a very unpleasant and stressful. However this experience brought to my attention just how much my friend cared about me and how much he really believed in me and abilities, and that kind of affirmation is priceless.

Borrowing money from friends

Borrowing money from friends: alternatives

The particulars of taking out a loan from a friend can be very frightening to many people. It may be a bit embarrassing to say the least. There are many other options to get some money out there including but not limited to the following all of which is thorough descriptions within the links: