The potential complexity of borrowing from someone close to you is a stark reminder of the importance of maintaining a healthy financial position that can enable you borrow funds elsewhere when emergencies strike so that you don't have to ask friends or family for money.
However, borrowing from those close to you can also be a double-edged sword, as failure to honour the agreed pay back plan could result in hurt feelings and a damaged relationship.
Below are Five Tips to ensuring you're taking the proper steps when borrowing money from friends and family.
1. Look at the Bigger Financial Picture
Asking a friend or family member for financial help can feel awkward or put the other person in a difficult position. This is why you should consider all your alternative borrowing options to see if you can reasonably avoid it.
For instance, those with good credit might instead consider a personal loan from a digital loan app like OPesa that has a borrowing range of Sh1,500 -Sh50,000 and manageable interest rates which enables get through your financial shortfalls without asking friends or family for money.
The bottom line here is to ask yourself what do you need the money for.
2. Be Realistic About How Much Money You Need
There are some situations that may require you to ask friends or family for financial help. Run the numbers to get an idea of how much money you really need to borrow.
Just make sure to be realistic so that you don't have to go back to your loved one to ask for more.
Should you find yourself right from the start unable to achieve your financial goals through borrowing from family and friends, OPesa loan app becomes your next best option.
3. Know Who & How to Ask
Once you know how much money you need to borrow, think about the people in your life who might be in a position to provide financial help.
However, be careful when making assumptions about another person's finances, and avoid asking someone who may jeopardize their own financial health in order to help. With OPesa loan app, however, you don't have to worry about this.
4. Create a Loan Contract
This step might be easy to overlook, but a simple loan contract can provide your friend or family member with peace of mind and make them feel more comfortable providing a loan.
5. Prioritize Your Loan Payments
Whether you're borrowing money from say OPesa loan app, bank or a loved one, making your payments on time should be a priority. Always treat your loan repayment as a regular line item on your budget.