springhill group medical – “A loan tends to lose itself and the friend.”
A candid warning for soft-hearted people who just can’t turn down a request from a relative or a close friend. Unfortunately, there exists a gray area when it comes to money and family. A loan, for instance, can cause relationship to become bad when not handled in a proper manner.
Someone trying to ask for a loan should be equally prepared to hear a lecture. That’s because he’s bound to state the reason why he’s in need of money and where he’s planning to use it. For example, lending money to a brother just to indulge his knack of collecting designer shoes doesn’t look like a good call.
Now, if the reason for loaning seems valid to you, the next precaution is to put it in writing to make everything clear.
We are all aware that someone who wants to borrow money might damage his memory afterwards.
Well, it might sound awkward or ruthless to most but if you think of how much worse it can get if you get into court because of misunderstanding, it won’t appear as bad.
Usually, when people loan money to someone he personally knows, he just settles for a verbal agreement which can be very dangerous for him when it is contested. It will just turn into a he-said/she-said scenario where there’s only the word of the people concern to be taken into account.
We have to remember that financial dealings, however informal, should always come with a written contract for those just-in-case scenarios. In fact, no one in the commercial world does business without a written evidence which should suffice as a warning to us.
Having something written clearly in paper saves the parties from ambiguity and will ensure that they are on talking about the same thing. More often than not, people can enter in a verbal agreement in good faith but actually interpret it differently down the road.
The written agreement should state clearly the following:
-when the payment is due
-what the mode of payment should be
-whether there is an interest to be paid and its rate
-what happens if the borrower fails to pay back