Loans, start with the family?
Loans are an important part of life today, whether it be a loan for a new car, or a mortgage for that new house you’ve always been wanting. Because money doesn’t grow on trees – if only! – it’s always good advice to think carefully before asking family and relatives, as it’s well known that friendship and loans do not mix. If you borrow from family, or friends, will there be strings attached? Will it affect your relationship?
When asking, make an appointment to talk about this unemotionally (it may be difficult but do try this), and in a business-like manner – no tears, just state the facts of what you need, for what, for how long, etc. And don’t forget to say how much interest you will pay them, if any. Also, if they seem reluctant, don’t make them decide on the spot. Give them some time to think about how it will affect their lives, and have them get back to you with any questions once they have thought it over.
The best way when borrowing from friends is to make it a business relationship. Firstly, can they afford to loan you this money? What will happen to them if you default? Would it put them in hardship? If all seems well, then set out the conditions of payment, giving amount per month, and stating over how long the loan will be in effect.
Make up a contract, 2 copies one for each of you, containing the amount, the repayment schedule and the interest rate if there is one. Make sure you both sign it, and then make sure you pay on time.
If relatives are unable to help, or you would rather not ask them, there are other options. You could talk to your bank manager, giving the reason why you need it, etc, or you could use your credit cards, but only do this if you have a low interest rate.
For a short term loan, there is always the payday loan, where a company will loan you some of your paycheck in advance. As always, check the interest rate you will be charged. These companies sometimes charge an arm and a leg for this service, and it can some times be a vicious circle of needing a new loan to pay the old loan.
Look for more business opportunities. Maybe a temporary job would help pay those extra bills, or perhaps you could take care of children after school – ie for a limited time.