When things start to get scarce in the wallet, many of us are thinking about taking a loan and borrowing money to keep the budget afloat. But instead of comparing lenders, some are wondering if they should borrow money from their friends. Why not? There seems to be a lot of people on loan from and to their friends.
But don’t be too quick to make that decision. There are also a lot of disadvantages that you do not first think about. Have you read some of the biggest advantages and disadvantages of borrowing from their friends.
Friends are close at hand
A good friend is always there when you need it. If you happen to need a little extra money, a friend is often there, ready to help with a few bucks. When you borrow from your friends, you don’t have to compare interest rates and agreements between your friends. A loan from a friend is a loan based on trust.
Loans can break up friendships
The power of money is great. Big enough to keep out of the closest friendship. Too many times you have heard the story of how two good friends became enemies because of money. Loaning between friends can be a risky business, especially when larger sums are involved. If you owe a friend money, you may even feel morally inferior to your lender.
This feeling can quickly turn to resentment and anger towards your friend. The lender may also feel stressed as it does not always know when it will get the money back. Because you rarely arrange a payment plan, the borrower may have to remind the borrower about the loan, which few like to do.
Friends give low interest rates
What are some crowns among friends? When you borrow from a friend, you can expect a low interest rate or to borrow without interest. At least it is always disputable. A loan to a friend is more like a service than an investment on which to make money. Most times you can expect to pay back the loan amount. However, this can be seen as something negative if you are the lender. The money you lend could instead be used for investment and savings.
The lenders of the social circle
Do you lend money to your friends? Then you risk being your first choice when it comes to new loans. Then it won’t be long before distant friends you haven’t talked to for years knock on your door. Such horror examples are few and unlikely. But the risk is that you lend money to a variety of friends, family members and colleagues. What are you saying? Many drops small…
Friends can help you with problems
Good advice is worth the gold and advice from friends comes cheap. Sometimes it is more behind the lack of money than you first think. Friends are there, ready to help, to solve the problems they are supposed to have. A friend who needs to borrow money may also need a friend who can help with budgeting, saving or changing a lifestyle. If you have, or do you know, someone who has problems with debt, never hesitate to help or ask for help.