With it being a new year you could find yourself in a bind and need to borrow money, as in like yesterday. The first people you’ll naturally look to for financial assistance is your friends and families, as we usually turn to those we know. Here are some tips on how to avoid borrowing this year.
And even if that’s the case borrowing is never easy to do because while it’s your family and friends you often still don’t want to ask. But sometimes you really do need the money. And if that’s the case make the borrowing process more manageable this January and borrow like a pro in 3 simple steps.
- Take the borrowing process seriously to gain the credibility needed for the loan
Even if they’re your family and friends as it’s in no way an obligation on the lenders side but rather a favor to you if they do finance you. Make sure the financial assistance you require is essential. For example knowing the difference between borrowing money for your child’s school clothes compared to borrowing money to buy designer shoes is a start.
- Have a plan to prove you’ll stick to your word regarding payment
As although it is your family and friends you’re the one asking for the assistance and just like with any creditor you need to prove your trustworthiness. By explaining how you’ll repay your debt, and offering them a time frame in which they can expect to be repaid. Or even offering them some form of collateral they can hold onto to prove your commitment to paying the loan back in a timely manner.
- Have a written recorded agreement
This will assist in documenting all the details where the original terms of the loan are stated and that both the borrower and lender can keep. The details can include when payments will begin, when they’ll be made, the amount of each payment, and any interest arrangements agreed upon. By doing this, the recorded agreement will be invaluable if any one of the two of you decide to go back on your word.