Lending money to loved ones can be a slippery slope. While you might want to help out your nearest and dearest when they’re in need, you should do so with caution, and not before drawing up a basic plan. As soon as money gets into the equation, it’s important to go about your business with a certain level of objectivity. Given that you remember these golden money lending rules, you can rest assured that things won’t get awkward for either you or your loved one.
- Draw Up A Contract
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As official as it might sound, drawing up a contract before you lend a large sum of money can really help you out in the long run. Having a document to which you and your friend can refer can make it much simpler to decide upon a few rules and make sure you’re sticking to them. If you’re the one lending money, it’s up to you to set the terms of the agreement. Make sure you’re both on board, set up a payment system and go ahead with it. If your loved one really wants to pay you back, they will have no issue keeping to a contract.
- Keep Within The Agreement
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Just because you’ve lent a friend a little cash, it doesn’t mean that they owe you in some way. Apart from the boundaries of the contract you have set up, your relationship should continue as normal. Expecting someone to go out of their way to appease you can get you into murky waters and might soon begin to have a negative effect on your relationship. Make sure you get your money back but with the rest, carry on as normal.
- See How Else You Might Help
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Before you agree to lend a hefty sum of money, make sure there aren’t any other ways that you can help out. Often, there are other options out there that your friend might not be aware of, so help them to explore their possibilities. It might be as little as drawing up a savings plan, helping them to set up a meeting at the bank or looking through past bank statements. Offer to be a supporting role in their life and make it easier for them to get back on track.
