As you complete your tax return and your income suddenly increases, expect family and friends to come out of their hiding places with their hands out asking for loans. While there may be a natural pull or even a sense of obligation to help friends and relatives in their time of need, many loans experience complications later on.
For those of you who may be asked by a friend, loved one or relative for a personal loan, here are four ways to approach giving loans to those you care about. Courtesy of Bankrate.com:
- Lend only what you can afford without borrowing and expect to never see it again.
- Never co-sign a loan. If the bank won’t lend, neither should you.
- Do not put your own finances at risk to help a loved one. Sympathy, emotional support and being there as a friend are worth more than money.
- If you have already made a loan and haven’t been paid back, and you value the relationship with the person, let it go. Who knows, maybe you’ll get a nice surprise when you least expect it.