{"id":26875,"date":"2021-08-24T15:45:10","date_gmt":"2021-08-24T19:45:10","guid":{"rendered":"https:\/\/blog.eztaxreturn.com\/?p=26875"},"modified":"2023-06-05T13:20:50","modified_gmt":"2023-06-05T18:20:50","slug":"5-tips-for-lending-money-to-family-and-friends","status":"publish","type":"post","link":"https:\/\/staging.eztaxreturn.com\/blog\/5-tips-for-lending-money-to-family-and-friends\/","title":{"rendered":"5 Tips for Lending Money to Family and Friends"},"content":{"rendered":"\r\n<p class=\"wp-block-paragraph\">Lending money to a friend or family member is risky business.\u00a0 Although you don\u2019t want to see them suffer, there\u2019s always a possibility that you may not get your money back.\u00a0 As a result, it may put a strain on your relationship.\u00a0 According to <a href=\"https:\/\/www.lendingtree.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">LendingTree<\/a>, 41% of Americans have lent money to a loved one within the past year and twenty-seven percent regretted their decision.\u00a0 If someone close to you asks for a <a href=\"https:\/\/en.wikipedia.org\/wiki\/Loan\" target=\"_blank\" rel=\"noreferrer noopener\">loan<\/a>, keep the following tips in mind.<\/p>\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-consider-the-person-s-reputation\" class=\"wp-block-heading\"><strong>Consider the person\u2019s reputation<\/strong><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">There\u2019s a big difference between someone who has temporarily fallen on hard times and someone who was never good with money to begin with.\u00a0 If the person asking already has a reputation for being financially irresponsible, don\u2019t even waste your time.\u00a0 Once the money leaves your pocket, you\u2019ll never see it again.\u00a0 Only lend money to people you know you can trust.<\/p>\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-don-t-lend-more-than-you-can-afford\" class=\"wp-block-heading\"><strong>Don\u2019t lend more than you can afford<\/strong><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Be realistic about the amount you can afford to lend.\u00a0 You don\u2019t want to give the person a large sum of cash, then be struggling to pay your own bills.\u00a0 Plus, there\u2019s always a possibility that you may not get your money back.\u00a0 So don\u2019t give them more than you can afford to lose.<\/p>\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-get-the-agreement-in-writing\" class=\"wp-block-heading\"><strong>Get the agreement in writing<\/strong><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The best way to avoid any confusion and future headaches is to get everything in writing.\u00a0 Make it crystal clear that this is a loan, not a <a href=\"https:\/\/en.wikipedia.org\/wiki\/Gift\" target=\"_blank\" rel=\"noreferrer noopener\">gift<\/a>.\u00a0 Write down your names, the date, loan amount, expected monthly payments, when they\u2019re expected to start repaying the loan and the due date.\u00a0 Be as detailed as possible.\u00a0 If you plan to charge <a href=\"https:\/\/en.wikipedia.org\/wiki\/Interest\" target=\"_blank\" rel=\"noreferrer noopener\">interest<\/a>, include that in your agreement as well.\u00a0 Be sure to include consequences for nonpayment so everyone is on the same page.\u00a0 Once they start making payments, keep a log of how much they paid, the date and the remaining <a href=\"https:\/\/en.wikipedia.org\/wiki\/Balance_(accounting)\" target=\"_blank\" rel=\"noreferrer noopener\">balance<\/a>.<\/p>\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-don-t-be-scared-to-say-no\" class=\"wp-block-heading\"><strong>Don\u2019t be scared to say no<\/strong><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Don\u2019t let anyone pressure you into doing anything you aren\u2019t comfortable with.\u00a0 You aren\u2019t obligated to fix anyone else\u2019s mess.\u00a0 If your gut says no, then listen to your inner voice.\u00a0 Tell your loved one \u201cNO\u201d and be firm with your decision.\u00a0 Don\u2019t offer an explanation because then they\u2019ll try to find a way to change your mind.\u00a0<\/p>\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-never-cosign-a-loan\" class=\"wp-block-heading\"><strong>Never cosign a loan <\/strong><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">If someone asks you to <a href=\"https:\/\/en.wikipedia.org\/wiki\/Cosign\" target=\"_blank\" rel=\"noreferrer noopener\">cosign<\/a> a loan for them, hopefully alarm bells go off in your head.\u00a0 People only need a cosigner when they can\u2019t get approved for a loan on their own.\u00a0 Commonly, it\u2019s because they either have no credit or a bad credit score.\u00a0 In any case, it\u2019s best to say no.\u00a0 As a cosigner, you\u2019ll be 100% responsible if they decide to stop paying their loan.\u00a0 Your credit also suffers if they start skipping payments or paying late.\u00a0 To make matters worse, you won\u2019t be able to take your name off the loan.\u00a0 The <a href=\"https:\/\/en.wikipedia.org\/wiki\/Debt\" target=\"_blank\" rel=\"noreferrer noopener\">debt<\/a> will be stuck with you for as long as it\u2019s owed.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<h2 style=\"text-align: center;\">File your taxes fast and ez.\u00a0 Biggest possible refund, guaranteed.<\/h2>\r\n","protected":false},"excerpt":{"rendered":"<p>Lending money to a friend or family member is risky business.\u00a0 Although you don\u2019t want to see them suffer, there\u2019s always a possibility that you may not get your money back.\u00a0 As a result, it may put a strain on your relationship.\u00a0 According to LendingTree, 41% of Americans have lent money to a loved one [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":26896,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-26875","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personal-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.13 (Yoast SEO v20.13) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>5 Tips for Lending Money to Family and Friends<\/title>\n<meta name=\"description\" content=\"Lending money to a friend or family member is risky business. 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