Borrowing Money from a Friend – How To Ensure It Won’t Hurt Your Relationship
No matter how comfortably frank you are with your friend, asking for a loan does not sound like a very good idea. Studies have shown that most Australian students face trouble managing finances and might require a loan for anything beyond their monthly expenses. However, as a student, the biggest assets of your life are your friends and loved ones. Deep down, you know that asking for money might put that relationship at risk.
So, if you are in a dire need and there seems to be no other option, make sure that you borrow money such that it won’t hurt the trust and relationship between your friends. Here are a few simple-to-follow tips to help you ensure just that:
Explain Your Situation
You don’t want your friend to think that you are borrowing money for something you don’t actually need. In order to avoid any such misunderstanding, you must clearly explain your needs as well as your financial situation with your friend. In case you are the one confusing your wants with your needs, a good friend might help you see things more clearly. He or she may also be able to help you find other options better than borrowing from a friend.
So, if you trust them enough to borrow money from them, you should also trust them enough to share your actual situation with them.
When it comes to monetary dealings, there is nothing wrong in being professional even with your loved ones, especially when you are the one borrowing the money. Your friend won’t mind if you’d ask them to put everything in writing. Creditors have better memories than debtors they say and writing everything down will help you avoid any confusion later.
Prepare a Repayment Plan
No matter how much your friend trust you, he or she might have a little doubt about the money being returned in a timely manner. So, it is best to mutually create a repayment plan that suits both of you. If you both are Australian students, your friend might also need the money back soon enough. Discuss their future needs with them and schedule your payments accordingly.
Find a Mediator
Involving a mediator to witness the whole transaction and terms will help you secure and strengthen your friend’s trust in you. The best person to play this role would be a mutual friend trusted by both the parties. Make sure that the mediator is aware of all the terms as well as the repayment plan and schedule. He or she must also be kept aware of all the repayments you make in the future.
Make Repayment Your Priority
Once you have borrowed the money, repaying your debt should be your major priority. You will have to recreate and manage your monthly budget accordingly. Cut down your extra expenses and make sure you stick to your repayment plan. A timely repayment will save both of you a lot of trouble and embarrassment.
Now you know how you can borrow money from a friend without tarnishing your trust and value. Still, the best thing to do is to cut down your own expenses and save more money in order to handle your needs on your own. For Australian students, it would also be a good lesson for future money management.