Borrowing money from friends can be deceptive, often refers to difficulty in relationships if it is not solved honestly and clear communication. Few things are uncomfortable than chasing a friend who has not returned the loan. However, in accordance with a few principles of simple Etiquette, you can be wandering at these conditions well and prevent unnecessary drama.
Should you borrow money from friends?
Sometimes borrowing money from friends and family is the best way of your financial situation. You may not have a debt that needs you to qualify for a loan. You may have an emergency cost when you need money immediately. No matter whatever you have your situation, you borrow money from friends, something is clear that the activities and wrong maintain your relationship and avoid drama.
Quiet
Tell your friend directly why you need money and what you intend to use for you. Introductions about why you need a loan can make it difficult for your friend to admit loans. Try not to do some excuses, but instead think of it. It is also important to consider someone’s financial status before asking for borrowing from them. Do not put your friend in a difficult place if they can’t afford money. And you should not be guilty of your friend in lending money. If they say they will not give you a loan, don’t oppress them more.
Create a loan agreement
Like any loan, borrowing money from friends should come with a loan agreement. This should include how much to be adhered, where it will be restored, and if there is a charged interest. It should also be spoken about what happens if your friend fails to pay. While a signed agreement can seem unnecessarily among friends, we will protect both parties later. If you borrow a larger amount of money, you may even want a lawyer to draw this agreement.
Keep your payment promise
If you borrow money from friends, make sure you are able to pay a loan. It is important to talk about how they would be restored, for example, Venomo, check, or cash. Then, you will need to use money accordingly so you don’t miss the fees. Remember, if you appreciate your relationship with your friend, respect your payment promise is very important.
Consider the tax consequences
If you borrow a large sum of money from friends, there may be tax consequences to consider. Loan among friends and family can be taxed in both parties. If the loan amount exceeds $ 10,000, any interest payments may be considered taxable income. In addition, if the loan is forgiven, it may be treated as a tax gift. It is important to understand your loan effects so that no surprise you or your friend.
Bolle money from friends before? What was your experience? Let us know them in a comment.
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