The Advantages and Disadvantages of Lending Money to Friends

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Lending money to friends may seem to be a natural act of friendship and kindness, but if it is not handled properly, it can irreparably damage the friendship. For you to have more disposable income that you can lend your friends, you might want to look into playing 토토사이트 and try to rake in some money. The following suggestions will identify some common questions that should be asked before reaching a decision.

  1. How Much Money is Required and when Will it Be Repaid?

A small amount of money will not often present any problems to the lender or to the recipient. It can help to provide temporary assistance until the money can be repaid. However, if a friend asks for a large sum of money, it will be necessary to tread more carefully. Rather than unquestionably handing over a large loan to a friend, it is best to sit down and work out a financial plan of action that will suit both parties involved.

Will there be a weekly or monthly payment? How much will this amount to? Writing down the details of the loan can let both parties know where they stand. Carefully stipulating all the terms and agreements will help to prevent misunderstandings or quarrels later on. It is also an important way to let the friend know that even though it is a personal loan, there is still an obligation to pay the money back in a timely manner.

  1. Will the Loan Get in the Way of the Friendship?

Some people are surprised to see their friendship alter after a personal loan has been made. It may make the friend who provided the loan more suspicious and critical. They may even resent their friend when they see them spending money rather than repaying it. If this occurs, a friendship may very quickly suffer and even come to an end, as no one wants to be viewed with suspicion.

  1. Handling Non-Repayment

Unlike banks and credit card companies that are able to impose penalties for overdrafts and late payments, non-repayment from a friend can be much more difficult to deal with. Will the friend who lent the money be willing to relax the terms of the repayment? What if the friend has been declared bankrupt? Legal action will certainly end the friendship and it is bound to prove futile if there is no money available to repay. Another alternative is to write off the loan altogether.

Some friends choose to help out in other ways, because the risks of lending money are far too high for some to place their friendship in jeopardy.

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