Banking

How not to strain your relationship with friends haven lend them money

Lending money – As I walked down the narrow street I can tell that something was not in its place, not the usual calm neighborhood I used to know.

It was on one of my usual routine visit to a childhood friend’s house who stays a few steps away from the very spot where several persons were forcing their entrance to take a sight of an event that in my view was not a usual fun fare.

Out of curiosity though not in my usual behavior I moved closer to ask questions, just before I could step further, I could recognize two faces who eventually were my friends, Chike and Emeka then two police men.

In this development, Chike had handcuffs in his hands already, without further thoughts I already came to a conclusion of what was making the fuse.

Emeka had intimated me earlier on how Chike borrowed N100k from him having promised to pay back over a predetermined period, Chike however, failed to keep his words.

I’ve had a course to talk to Chike on this development, which he promised to pay back but keeps on defaulting for reasons best known to him.

Long story made short: Two friends had their relationship gone strain because of money.

If you’re reading this piece you’re most fortunate because you are going to learn something that will see you through friends and life, to as well preserve your relationship with them.

Read also: Why relationship talk should involve money questions

Lending money to friends is not a bad idea, but most often the consequence may not worth the stress.

Here are steps that’ll help you stay out of trouble with close friends and still maintain your friendship afterward having lend them money.

#1. Lend to friends who have the capacity to pay back

The first fact check in lending money to anyone is their ability to pay back as at when due. It’s reasonable to say you should know the financial capacity of a borrower before you part with money.

Even the banks in this case have obligor limit and why you cannot get certain amounts as loan just because you have a need for money.

Assuming your friend is on a payroll with a monthly salary of N30k and is asking to borrow N100k from you to pay back over a period of 3 months.

You’ll be reasonably stupid to think he’ll be paying back N20k or even more monthly which should sum up to N60k in 3 months or more, thinking he’ll be surviving on N10k all these while.

In this case you’re still running on a deficit of N40k.

The character and willingness to pay back may be there, but the capacity isn’t there you know.

#2. Don’t lend friends or anyone what you can’t afford to lose

This is common sense, kindly be informed that lending out money could go either ways, it’s either you recover such loan or it goes bad.

Security should apply first, by ultimate good faith you will need to part with an amount you can forfeit if the loan goes bad.

If you think a borrower lacks capacity why not give him/her an mount you can afford to lose for free, they can go source money elsewhere to make up the required sum.

#3. You have to establish the borrower’s intent

There are some wants that are not necessary in economic scale of preference, for example it’ll be very stupid of you to lend money to a friend who wants to use it for; wedding, burial, child dedication or gamble.

This may sound insensitive but the truth is, money borrowed for any of these reasons have 98% chances of not being returned.

These are termed optional issues you can actually do without, people borrowing for wedding will tell you they’ll return the money from the proceed sprayed to them. Even if they didn’t tell you how else do you expect them to realize such money, good luck anyway.

#4. It’s safer to lend your gender

As a man lend strictly to your gender, as a woman your gender should be ok for you.

Not to say that there are genders that do not default, however, women are found to default more in soft loans, while men do most in organized loans.

Lending to your gender will ensure you’re rigid and immune of emotional blackmail, you can instill any level of approach to recover your money.

#5. If you must lend money, lend to people close to you

Study has shown that lending to people close to you pays than otherwise.

If you stay in Anambra, it’ll make the most stupid to lend money to a friend in Lagos.

If they default on such loan how can you drive it?

Lending to someone in the same town will ensure visiting physically at every instance of elapse tenor to ask for your money.

The Lagos friend may decide to block you on calls and WhatsApp even bad mouth you, be wise.

#6 Have your loan in writing and ask for collateral

A written agreement should help secure your money when you’re parting with organized loan, may not stop default anyway.

Ask for a tangible collateral that worth the money, you need to play safe. Loans backed up hardly go bad, in event it does you can recover your money from the collateral, so don’t be too afraid to ask for one.

#7. Avoid lending the second time

Study has shown that most friends return the first loan to gain your confidence, most often with a second agenda to borrow a higher amount.

Most second missionary loans are not returned, they go bad and that’s it.

If they manage to pay back the first time, a second chance may not worth the struggle.

#8. Do not lend at all

Friends may not like this idea but it’s just about the safest route staying out of trouble with friends for lending money.

They’ll feel bad yes, but it saves you emotional pains, time and money.

I can’t stand the sight of dragging a friend irredeemably for lending money.

Hope you learned something from this piece, “Oya” share it for everyone to read and save someone from the pains of bad debt.

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