5 Questions to Ask Before You Lend Money to A Friend!

One of the most awkward questions someone can ask us is “can you lend me some money?” and whether this person is a close friend or not this question can be awkward to both parties. The decision can be difficult especially if you are not financially as comfortable as you would like or if you are not sure if they will return the money in the agreed upon time. 

To be on the safe side you should ask yourself the following questions and according to the answers you can make the decision on whether to lend them money or not. Also, in case you decide to refuse how should you reject them gently without making it even more awkward for the both of you and how to give them financial advice without embarrassing them further.

·       Do you know this person well? Are you close friends or just acquaintances?

·       Have you lent them money before and were they prompt in paying back the money or not?

·       Are they asking for a large amount of money? Will you be able to lend them this sum without ruining your own budget?

·       Did they offer a repayment plan/date or not?

·       Do they need money for something important or trivial?

Keep in mind:

If they are asking for a large sum and this is the first time you are having this kind of transaction with them then it is perfectly OK to ask them for a guarantee or written agreement. This guarantee can be through a trusted common party or another type of collateral.

Give them some financial advice:

If this person needs money to start a project or buy something specific there are many solutions available to them such as loans from microfinance companies or applying for a personal loan with their bank.

Apply for funding for your existing project through Faydety from the comfort of your own home!

 

“A banking product that lends you money is a credit card. These cards are not linked to a specific bank account

Some banking products that allow you to borrow money:

Credit Card:

Credit cards are cards that are not linked to a specific bank account. You can withdraw any amount from them to pay for your expenses which in turn becomes a debt you have to pay back to the bank plus interest. Depending on the bank you are granted a grace period between 45-58 days during which you can repay the loan without interest.

Its advantages are that you can use it in your transactions on the Internet, and this is in banks that offer discounts in the event that you bought from certain stores that are contracted with them.

Compare credit cards on offer by different banks on Faydety.

Loans:

There are many types of loans offered by banks depending on what you need a loan for which also determines the collateral needed for the loan. The most popular type of loan is:

Personal Loan:

A personal loan is a way to finance a special need such as a travel, a newborn, a wedding, and so on... Of course, taking out a loan means that you will still have to pay a monthly installment to repay back the loan amount plus a certain interest rate that varies with each bank.

The bank determines the possibility of financing a personal loan according to the applicant’s salary, their financial history and ability to repay the loan. The advantage of a personal loan is that it does not require collateral unlike other loans.

Access our personal loan calculator to find out which bank is most suitable for you.

Don’t forget to share our article why borrow from your friends when you can get a bank loan?