Before you go knocking on the door of a friend or family member to ask for money, there are some important questions you should ask and things you should know for the long- and short-term health of your relationship with these people. Perhaps you have an unanticipated expense, your salary is taking too long to arrive, or you do not have quite enough money saved to pay for your dream car.
Whatever the reason, if you’re in a tight financial situation, you may consider borrowing money; however, is borrowing from a friend or family member the best option? Before you ask loved ones for help, there’s more to consider than money. In this post, we’ll evaluate the factors to consider and recommend a better option for borrowing money – especially if you need it quickly.
When money is involved in a relationship, it can lead to feelings of resentment, trust issues, and disagreements. Furthermore, nearly three-quarter of people who borrow money from friends or family never repay the entire amount borrowed.
It’s understandable why many people advise against lending money to friends and family. Not only are the loans unlikely to be repaid, but they can also strain relationships. It is critical that you get it right from the start when borrowing money from family, friends, or even financial institutions.
First, examine all your options
Before approaching friends or family for a loan, consider all of your alternatives and borrowing options. There may be alternatives to borrowing from loved ones to address your financial situation.
Alternative options include:
- Reduce your spending wherever possible.
- Make a budget and stick to it.
- Get a part-time or second job.
- Request a pay increase from your employer.
- Negotiate your current financial obligations (interest rates and repayment terms with your existing lenders)
- Look into personal loan options at financial institutions (recommended because it is faster than all other methods listed, and we can help you get started in minutes).
Pros of borrowing from friends and family
More flexible terms. You can negotiate the loan terms with a friend or family member. In comparison to a financial institution, you may have a more flexible repayment schedule, interest rate (if any), and length of repayment.
There are fewer hoops to jump through. Your friend or family member may require proof that you can repay the loan. Nonetheless, they are unlikely to have the same stringent requirements as a financial institution.
Cons of borrowing from loved ones
- It causes added stress If you’re asking a friend or family member for a loan, you’re already in financial trouble. Add to that the fact that you’re asking a close friend for a loan, and you’ve got a recipe for social anxiety.
- It can be hard on relationships: When a financial transaction is added to a relationship, the dynamics change. There is no guarantee that the relationship will continue, let alone flourish. If the money causes resentment, guilt, or significantly shifts the balance of power, it breeds conflict.
Reasons why obtaining a loan from a financial institution may be your best option
To avoid missing out on important opportunities, being embarrassed by your landlord over rent, or having your children miss school, taking out a loan from a financial institution is a wise decision.
Not only does a loan make more financial sense, but it is also the ideal facility for assisting you during planned or unplanned events when time is of the essence. It also helps you avoid the drawbacks of borrowing from loved ones that were previously mentioned. The next thing to consider is which loan company has the best deal for you.
Get up to N5 million from Page
That is where Page Financials comes in. Page Financials provides quick access to loans of up to N5 million as long as you are a salary earner and meet the required criteria. That’s not all; at Page Financials, you also enjoy zero charge per transaction on our mobile app, and you can use our USSD code *258*3# to make quick transactions like paying bills, recharging airtime, and transferring funds. Customers can also put money aside as an investment and earn a competitive return on their money.
If you find yourself in a financial bind and need money quickly without jeopardizing your relationships with loved ones, contact a reputable lender to learn about the personal loan options available to you.