Growing up, you probably always heard your mother warning you about personal loans. If you ever did get a loan, she would tell you, there were certain things you must do to ensure that they were paid back. This is true whether you are getting a loan for yourself or loaning to somebody else.
There are many kernels of truth in what your mother told you. When it comes to personal loans, you have to not only be careful about your money, but also your friendship or other relationship with the person you’re involved with. When money enters the equation, things can change quickly. Usually for the worst.
Today we’re going to take a look at why your mother was right about personal loans. Are you borrowing from somebody else? Or are you loaning to a friend? Either way, you need to know the following facts.
Borrowing Money From A Friend
Sometimes we find ourselves in a financial pickle. Maybe our bank accounts are empty and we don’t get paid for another week. However, we need some groceries or to pay a bill. Or maybe our wallet was stolen and we can’t access our bank account until we get replacement materials.
Whatever the reason for needing money, your friends and other acquaintances are there to help you out. Their kindness means that they are willing to loan you some cash until you get paid. This is fantastic news for you, and probably makes you appreciate your relationships even more.
Whether you borrow fifty dollars or five-hundred, there are some rules that you must follow. First, only spend that money when absolutely necessary. The less you spend of it, the more you can give back in one chunk. The trick to paying back the money you borrowed is to make sure that you happen to begin with. If you borrow fifty dollars and only spend half of it, then that is twenty-five dollars you can get right back to your friend
Naturally, you want to pay your loan back as soon as possible. Not only will this ease your mind, but it will help maintain good relations with the person you borrow from. They want to help you, but they also want the money back. When you owe somebody money, tensions come into play. Be the best person possible and pay back what you owe.
Loaning To Someone Else
Sometimes we are the person who gets to loan money to somebody else. While good manners are at the forefront of the other situation, in this one you have to deal with the cards as they are played. Remember what your mama said? Any money you loan out, should be money that you can afford to lose. Don’t ever expect to get loaned money back. What this means in essence is that you should never part with any money unnecessarily. Don’t give someone you barely know a hundred dollars if you need that hundred dollars to feed your family for a week. If you happen to have some extra cash laying around, then there’s probably no harm done, but don’t ever expect to get it back.
Even if your friend has the best intentions, life happens. Maybe they never earn the money back. Maybe they forget. Maybe they pay half back but never the rest. We all want to be altruistic and help out our loved ones, but we need to understand what our mamas warned us about.
Personal loans may feel casual, but they are important business. Remember to pay back as soon as possible if you are borrowing, and remember that you shouldn’t loan out money you can’t afford to lose. Keeping these two ideas in mind will make personal loans a better venture in your future.