Whenever you are in need of cash, the first thing you think of is calling your friend or close relative.
While getting money from friends and family has its own advantages, it does not come without its short comings.
Here are some reasons why you should never borrow money from your friends or relatives:
1. They will scrutinize you
If you borrow money from your friends and family, they will be keen to track how you spend every cent of that money. You buy a new pair of shoes and they will begin questioning your spending habits. Worse even, they will be talking behind your back about how you are getting new things without repaying their debt.
Truth be told, if you have a loan from your friend and another from a bank, you will prioritize the one from the bank. As such, you may end up staying with your friend’s money for a longer period and it may affect the relationship.
3. No terms
When you borrow money from friends and family, usually there are no set terms such as when and how you should repay. While it may seem like a good thing since you have no pressure to repay, it may strain your relationship.
4. Strings attached
Once they lend you the money, some relatives and friends believe that they should be entitled to certain favors. For instance, they may expect you to offer them free services as a way of being grateful for the lent money.
5. In case they want their money back
Just in case trouble comes their way and they need money urgently, they will come back to you asking for their money. In as much as they would want to give you ample time to repay it, they would have no choice than ask back for their money. This will of course leave you feeling devastated and helpless.
6. There are many options
Even though most friends and family won’t charge you an interest for the borrowed money, you can explore other options that will not affect your relationships with those that are close to you. And, there are so many financial institutions that can lend you money – with an interest though.