5 Tips to Stay on Loans to Friends Without Losing Friendship
Friends often do not set rules and the loan goes to both sides with different expectations. Learn how to prevent such situations.
What is written is given
“After all, we won’t write a contract, that would be stupid, we’ve known each other since kindergarten …” Is that familiar? But remember that a contract is not just a financial and time burden, it can save a lot of trouble for both the borrower and the lender.
- It clearly sets out the rules under which you lend money.
- Determines how and when the debtor repays the money.
If you still find the option stupid, consider extreme cases – if something happens to your friend and no one knows how to get your money back?
Forget about writing a “contract” on the ripped back of a magazine or a beer mat. On the Internet you will find a sample contract and all necessary details. Be sure not to underestimate the preparation of the contract. Although of course you do not want to earn from your friends, imagine that it is a classic non-bank loan, which has exactly the amount of repayments and the repayment date.
Tell about your feelings
It may happen that your good intention – to borrow, but under the condition of writing a contract – does not meet with a positive response. At this point, remember that the contract protects not only the creditor but also the debtor.
Most misunderstandings start with poor communication , so talk to a friend about your feelings about taking a step. If he needs to borrow, he finds himself alone in a difficult situation, but at the same time he should have an understanding for your concerns and realize that a non-bank loan would cost more for any company than for goodwill and friendship.
Do not condemn or be impatient
Imagine a situation where you lend money to a friend. You have a contract, a friend is grateful and everything seems fine. The first installment time is approaching and you suddenly learn that he has gone on an expensive trip. Or you went to a luxury dinner.
You feel a little cheated and worried that his ejection from the hoof will affect the ability to repay. You try not to show your feelings, but you still do not forgive the mocking remark.
If you decide to lend a friend, be consistent in showing confidence . This will save you negative feelings for yourself and the borrower.
According to a survey by Loewenstein and Dezs, 85% of debtors have no doubts about repayment of their debts and 35% of creditors doubt that they will get their money back. So do not put your friends in an unpleasant situation when they feel that you are watching each of his expenses and do not trust him.
Solve problems only when they occur. And even in this situation, do not relent in consistency. Insist on adherence to the agreed rules , speak openly about your feelings and calmly demand that the written conditions be met.
Don’t be afraid to say no
Of course, you also have the right to refuse a loan to a friend . Such a decision is especially responsible when you have strong doubts about your friend’s solvency or guarding your negative feelings.
Kindness is not your duty and a friend will certainly understand such a decision. But refusal can also be communicated with a view to maintaining good relations.
Find another way to help
You can help your friend in financial distress without granting a loan.
- Express your regret , offer support to your friend.
- Try to find a solution together that could save you money .
- Offer help in finding a job or other earnings.
- Recommend a credible company with a non-bank loan.
- Reduce its costs – offer carpool to work, help pick up children from kindergarten or invite them to dinner.
- Delight him with small gifts that do not bind anything. For example, share your harvest from a greenhouse or garden.