Does Financial Etiquette Allow Borrowing From Friends And Family?

Are you in a dilemma to decide whether to ask family and friends for financial help? Some situations might demand immediate financial attention. Loans from near and dear ones can seem the most convenient way.

They are like a reliable source for borrowing money. However, improper handling of finances can increase the tension between personal relations. If you are unsure about the impact of borrowing from within your known circle, better choose other options.

For any trivial and urgent necessity, get quick loans from a direct lender. This is a 24/7 available lending facility that you can approach online. Since they are loan providers, you must not have any hesitation to apply for loans.

The best part is that these loans also come with the flexibility that you might expect from personal connections. Moreover, you will be more accountable to repay them as they are loans.

This does not prove that the other way should be out of your list. To understand whether borrowing from friends and family will work for you, go through this blog. It has demonstrated the setbacks and perks of utilising this form of borrowing.

Aspects that can turn your relationship bitter or sweet

You cannot deny that borrowing will have zero effect on your relationship. Money matters should not be taken lightly as it can ruin your rapport with your near and dear ones. Getting financial assistance from loved ones might seem the simplest of all tasks.

They might have assured you multiple times about their support during your tough time. However, not everyone will be actually ready to provide you with the needed supply of cash. It does not mean that others will not get ready to help you.

First, take note of the disadvantages you have to deal with.

1. The negative side of borrowing from friends and family

Financial transactions between the nearest kin have some side effects. You cannot overlook them if you are considering this option.

Returning the money might be challenging

As they are your family or friends, you might lag the accountability factor. You know that they are your near and dear ones. This thinking can act against you and repaying on time becomes challenging.

You might lack the motivation to save religiously to return their money on time. Since you know them well, you know that they will hardly follow you up for the repayments.

It should not be like this. This is because next time, they will think twice before offering you help. This will happen if you do not pay serious attention to repaying this present debt.

The trust factor will suffer

If they are lending you for the first time, they might be doubtful about your financial behaviour. Moreover, if they come to know that you have poor credit scores, they might find it difficult to trust you. With a clean financial background, you can easily convince them.

However, after this, if you fail to pay back within time, it will ruin everything. Based on this failed financial relationship, other problems can pop up in future. Stay away from such complexities by getting small loans from a direct lender.

You will treat these lenders seriously as they can impact your financial history. Moreover, you are accountable to repay them within the deadline. Otherwise, you have to deal with late charges and accruing rates of interest.

This might not be the case with personal connections. For this factor, your financial dealings can take a toll on personal relationship.

2. The positive sides of borrowing from family or friends

Depending on certain circumstances, you can contemplate trying this option. There is no problem if you have responsible financial behaviour. Above all, you give due importance to your relationship with your loved ones.

The advantages of getting financial support from them are:

More casual and less formal

You do not have to stick to standard lending terms and conditions. Your near and dear ones are aware of your situation. They might get ready to customise the terms that are more suitable for you.

They believe you and they do not rely their decision on documents like credit reports. This kind of rapport is mainly built from personal character. The way you treat them is basically a decisive factor in this matter.

You are dealing with a human

Unlike mainstream and online lenders, you will have a more human touch. They empathise with your situation and you can expect some assistance from them. They are your family and friends and you can ask them for help without any hesitation.

In return, you must return the money on time. Moreover, you must remember what they did to you. If possible, you must try to help them during their difficult times.

Therefore, these dealings totally depend on the mutual understanding you have with your loved ones. It is not like the lender studies your affordability to either accept or reject your application.

3. The considerations you should have while borrowing

This financial dealing can affect your relationship. Thus, you should be very careful about the pointers that you must consider.

Borrow what you can afford

This same logic should apply to this case as well. Just because you know them very well, you must not exploit them. You are very well aware that they cannot say ‘no’ to you.

For this reason, you ask for an unreasonable amount. Rather, you must take out something that can fulfil your needs and is easy for you to repay. Formulate a budget first and then request for the amount.

Understand their temperament

Here, you must be attentive to the person you are reaching out to for help. Are they easy to convince? You must be familiar with their attitude.

Devise your approach keeping this thing in mind. Not to forget that this financial dealing will count upon the trust factor.

The bottom line

You must not skip the defining step to decide the terms and conditions. Borrowing is a serious financial activity and you must treat it like that manner. Set the deadline within which you must repay.

Roscoe Tanner is the Editor-in-Chief, leading a large team of writers at LoansForever. He has expertise in writing for various borrowing options like personal loans, long-term and short-term loans, unemployed loans and many more. Roscoe joined LoansForever in 2015 but previously worked with many reputed loan companies. He performs the major role as the editor, covering key aspects of loans and finance. Roscoe Tanner wants to serve at large in the progress of the company and to present a modern alternative to the traditional financial industry in the UK. He is a Certified Financial Planner and has a god-gift of connecting with people through his valuable suggestions and writings. His expertise as a writer and editor in the finance industry is based on his education qualification. Roscoe has done a Master of Business Administration (MBA) in Finance.

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