Tips on Lending Money to the Relatives
Have you ever faced a situation when you have been asked for money by a relative and you know the consequences and therefore want to avoid the situation? It happens with everyone and it is an unavoidable situation if you are not good at saying a “No”. The best way to handle such relatives is being assertive about your decision. If you are one like me and had faced a lot of problem in the past, you can follow the simple yet effective tips. Trust me! I have been benefited following them and I am pretty sure, you will gain better results too. I wanted to help my relative but my aim was to get the money back too.
How to Lend Money to someone you know?
- Be Specific: Don’t beat around the bush. It is one of the most vulnerable situations one may fall prey to. When you are ready to lend money, you should know the ways of getting it back too. Straight away, come to the point and insist that you want the money in a specific time frame. If need be, you can make things legal and use a stamp paper to make this transaction successful. Most of the time, relatives take our money for granted and get too relax when it comes to paying us back. You need to get professional. Either he or she borrows or doesn’t. You are not at loss. If the borrower intends to pay, he or she will not mind the deal.
- Fix a date: When you fix a date on which installments need to be paid, you will get something every month rather than waiting for long for the full amount to be paid. This makes it easier for the borrower too and you get your money in installments every month like EMI. Do not forget to check how to improve CIBIL Score if you have a credit card. Anyway lets back to topic.
If the borrower is genuine, he or she won’t mind adding you as a beneficiary and paying the amount every month on that date chosen.
- Penalize: Only paying the said sum and getting the money on a date are not enough. You need to tell the person that there will be a penalty imposed in case the money is not paid on time. This will instill fear in the mind of the relative seeking monetary help. However, there will be two scenarios; either the relative will agree to the condition or he will withdraw the proposal. You will be saved from future disaster.
Every time, I had helped my relatives, I fell into thick soup. Now, no more challenges as I have been working on these smarter ways and getting the problem resolved. I won’t deny that a few had declined the conditions while those who were genuinely in need have come forward and are still paying on time. Things will get streamlined if you know the tips and tricks.
Also, you should check the payment history of the person. If he or she has been known to be defaulter in the social circle, you should avoid lending money. At times, you come across people who have tough situations in life and you sympathize with them and try to help. It is imperative that you maintain the relationship while being professional at the same time. You can’t be rude of course! You can definitely do by playing around with words.