good excuses for needing money

5 Reasons Not To Borrow Money From Friends

Reasons Not To Borrow Money From Friends

5 Reasons Not To Borrow Money From Friends

Friendship ends with money – Everyone has probably heard this saying a minimum of once in their life. But is that basically true? Can alittle loan from your ally actually become a problem? And what must you definitely concentrate to if you would like to borrow money privately?

Whether summer sale, winter sale or Black Friday – nowadays the temptations within the type of discounts and so-called zero percent financing are known to be waiting around every corner. after all you may shop to your heart’s content until your mastercard glows, but anyone who has ever exceeded their limit knows all too well that the usually very high interest rates can often cause a rude awakening.

And putting off a loan from the bank only for that’s actually far too exaggerated, especially if you have good friends and nice relatives . But what initially glance feels like a practical and uncomplicated alternative to expensive bank loans can quickly prove to be a nasty trap.

good excuses for needing money
excuses to ask for money,
good reasons to ask for money,
good excuses to ask for money

Why you ought to always watch out with a private loan

First of all, it should be said that borrowing money from friends, relatives or acquaintances doesn’t automatically must end in disaster. But if you’re taking the all things too clearly and borrow money without a written contract, collateral or certain framework conditions, as an exampleyou’re putting even the strongest friendship to a tough test – because when it involves money, altruism is thought to be quite quick on the route.

1. Trust is sweet, contracts are better

Even if it’s your ally, your twin sister or maybe your soul mate: Anyone who borrows money from a non-public person should always draw up a contract in which the quantity borrowed, the term and also the other conditions are recorded in writing. during this way, both parties are protected within the event that a dispute should arise for whatever reason.

2. Sudden blackout

In the hustle and bustle of everyday life, it can quickly occur that you just simply forget that the last installment was actually due per week ago – and although you didn’t consciously forget it in the least, it can have the identical effect on the lender . Therefore, you must either transfer the upcoming installments by parliamentary law or elicit a brief written confirmation if you fork up the money personally.

3. Unexpected money problems

If the car gives up the ghost out of the blue and has got to visit the workshop, the washing machine spontaneously stops working or unexpected additional payments are due, it can quickly happen that the lender wants the borrowed a reimbursement much faster than originally thought. within the worst case, you then need to eliminate a bridging loan from the bank – and frequently at interest rates that are beyond good and bad.

4. Friends don’t charge interest – or even they do?

Of course, if you lend money to friends, you’ll be able to also charge interest on that – whether or not which will not go down well and leave a foul taste in your mouth. Anyone who has problems with this or even questions the friendship consequently should communicate this openly and honestly right from the beginning . Good to know: Since the tax office often regards a non-public loan as so-called investment aid, it can even be a sensible move because of the tax deductibility if you really charge interest.

5. When the tax authorities surprisingly ask you to pay

Anyone who isn’t careful with a private loan, doesn’t charge any or too little interest  and also doesn’t record anything in writing, quickly arouses the suspicion of the responsible tax office that one wants to avoid wasting the gift tax – which cannot only be very expensive for everybody involved but may even result in legal consequences which will have a long-lasting effect on even the strongest friendship.

5 tips: Friendship doesn’t end with money.

-Ask what he/she needs the cash for. It feels better for both of you once you know what is going on on with the cash

-Ask yourself if you may also expose the money. Giving is good! And sometimes it’s just not worth thinking long a few sum that you just don’t really want anyway

-Also try and help in other ways. The emergency situation within which someone wants to borrow money from you’ll perhaps be solved during a completely different way than with money

-Give him or her time. Doesn’t stand on the mat a day and ask questions. Debtors have enough worries. you do not must feel guilty too

-Negotiate a contract. If you would like to be absolutely sure, you’ll be able to definitely founded a contract. handwritten. Such a contract must contain the total names of the creditor and also the debtor and also the amount that has been lent. The place and also the current date must even be noted and both parties must sign. it’s also advisable to line a date before by which the cash are going to be repaid at the most recent – or if the repayment is to be made in installments, at what point in time which amount are due.