There were times, when we depended upon our friends and family for urgent financial assistance. The financial dependency on friends and family was also one of most common reasons for relationship to turn sour and eventually fall apart. This tendency to borrow from friends and family has greatly reduced in recent years due to the easy availability of personal loans with flexible repayment terms.
However, if you are thinking of borrowing money from your friends or family, here are few important things that you should keep in mind
- Awkwardness in relationships
When you borrow money from your friends or family members, it also brings in a kind of awkwardness when you meet him or her next time. You as a borrower in all likelihood will talk about when you intend to return the money, how you are planning to get this money etc. Similarly, your friend may also feel reluctant as the meeting can be perceived as one of the ways to remind you of repayment. In other words, bringing in a financial angle to a relationship can complicate it, sometimes irreversibly.
- Expectation to return the favour
When your friends or family lend you money, they also build an expectation that if ever they need any financial assistance, you will be there to help them. There could also be possibility that they may ask you to return the money soon after lending due to their own financial crisis. If you have already used the money by that time, you will end up holding yourself responsible for their financial crisis. You may also start questioning their intention in such scenario and in both the cases, it will not help to maintain the friendship or relationship.
- Explaining your financial situation
It is normal for friends or family to ask for the reason or usage of money before lending and sometimes it can be emotionally draining to justify the reason for borrowing. For example, you want to replace your old home appliance or pay the fees for your child’s higher education, but your friends or family may not find it a good reason to lend.
- Strained relationships
A big risk in borrowing from your friends or family is jeopardising your relationship with the person. Any delay in repayment or non-repayment for some other critical situation can cause a permanent rift.
So, what should one do?
Any of the above scenario may force you to think if borrowing from friends or family should even be considered. There could be many other questions in your mind as well and hence it is wise to consider other options first where the EMI payment is discreet, and you don’t have to disclose it to your friends or family.
One of such options could be to take a formal loan from Home Credit, where you can pay it back in flexible instalments. However, if your credit score or financial stability is not good to get a loan and borrowing from your friends or family is the best option, only borrow the amount which you are sure to pay them back.