The Actual Price Of Lending Money To Family
When one a close member of your family ask your help either to borrow money or in co-signing for a loan, should you do whatever you can to extend your help? Well, of course, you will! However, you can’t predict what’s going to happen in the future. The truth is, most people would consider lending money to any family members that they wish to help and the recipient is likely to accept with its great intention to suffice their financial needs.
However, some family members may not take it seriously as compared to the money borrowed from banks. The sad reality speaks that lending money to the family can be costly than other forms of loans. This is because relationships can potentially be ruined over insignificant money amounts.
What To Contemplate When Lending Money To Family
Money talk can be complicated. Most people might feel embarrassed as soon as this is being tackled. This is likely similar to the idea of payback conversation and terms that might be awkward. As a matter of fact, this can be heartless, and unfair in some cases. However, when you ignore such an idea, the possibilities of not getting paid, anger, dishonesty, and resentment are likely to occur.
A Loan Or A Tip?
The most comfortable and reliable means to support a family member is to give the money as a tip or a gift. Provided that lending money means being prepared for what you can potentially lose, why not give the money as a means to help. Somehow kindness is an endless ripple that goes back to you, so do it as a way of helping without expecting something in return.
Though it can be hard to build conversation regarding payback arrangements, it is a must that you set down and tackle this matter. Framing your conversation will help and starting it off with a positive note will lessen the tension. Being you as the lender and one of your family members as the borrower, you must set an agreement on how much and how long will the money be paid in full. This includes that date to which payment should be made, the amount and the target date to pay it in full.
Don’t Take It For Granted
If you’re able to obtain the help that you need, make sure that you take it for granted. The same as your other debt, you must take it seriously and pay it off as fast as you can. If you tend to ignore and take it for granted, it might create a gap between your relationships. In most cases, it can cause arguments and silent treatment when united by family gatherings or reunions. Therefore, you must be proactive in communicating and make sure to exert effort in giving the agreed payment on the time arranged.
Are You Just Allowing?
If you knew that your family member is in great financial struggle, you might need to communicate with the terms and consider late payments for as long as they are truly honest with their financial struggle. Some may have been trying frugal ways and various methods to earn extra, yet still in great financial distress. Having this situation might as well extend your help without thinking about the chances of getting your money back.
Moreover, if you’re really serious in helping your family members, why not help them explore debt relief options or other ways to compensate for their financial needs. This way aside from writing a cheque or giving cash, you’re helping them build and restore their finances.
Family First Priority
Family is undoubtedly more important than money. You can find certain ways to earn more money, but the family is irreplaceable. By putting the situation in an honest and kind manner can avoid barrier in relationships. If you’re financially stable and has spare cash setting in the bank aside from your emergency fund, investments and all sorts of saving, might as well share that spare amount, and make a difference in someone’s lives.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.