Thursday
Oct112012
How to avoid awkward moments when lending money
Brian Donlyuk - Vista Filare Specialist
6:22 PM
Your friend or relative asks you to loan them money. It can be $ 50 or $ 5000. This is a very tricky situation. A YES can get you down $ 5000 if the borrower does not repay you, a NO can imprint an impression on the person who clearly thought you would be good enough to help.
Any JUDGE type reality show will tell you that it is almost inevitable that people in close relationships will interpret the exchange of money differently. Is it a loan or a gift?
Here is what honest people to for each other: You loan your friend or relative money, they should NOT have a problem signing a promissory note. If they do, you know you have a problem because repaying the "loan" is a problem for them. Now you have to make a decision. You either give them the money and never expect to get it paid back (hurrah if they do), or you tell them no, you can't loan money without the signature. Totally your choice. What you should not do is give them the money without a written promise of repayment and EXPECT them to repay you.
How can you ask them to sign for the loan? The easiest is to explain that "if anything were to happen to you or them", how would the family know in the case of death of either of you what the deal was if it's only verbal?
Shakespeare really nailed it when he wrote: Neither a lender or borrower be. It refers to the reality that some people will resent you for lending them money and expect to get paid back. Before lending money, know which you are dealing with.
Your friend or relative asks you to loan them money. It can be $ 50 or $ 5000. This is a very tricky situation. A YES can get you down $ 5000 if the borrower does not repay you, a NO can imprint an impression on the person who clearly thought you would be good enough to help.
Any JUDGE type reality show will tell you that it is almost inevitable that people in close relationships will interpret the exchange of money differently. Is it a loan or a gift?
Here is what honest people to for each other: You loan your friend or relative money, they should NOT have a problem signing a promissory note. If they do, you know you have a problem because repaying the "loan" is a problem for them. Now you have to make a decision. You either give them the money and never expect to get it paid back (hurrah if they do), or you tell them no, you can't loan money without the signature. Totally your choice. What you should not do is give them the money without a written promise of repayment and EXPECT them to repay you.
How can you ask them to sign for the loan? The easiest is to explain that "if anything were to happen to you or them", how would the family know in the case of death of either of you what the deal was if it's only verbal?
Shakespeare really nailed it when he wrote: Neither a lender or borrower be. It refers to the reality that some people will resent you for lending them money and expect to get paid back. Before lending money, know which you are dealing with.
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