Lending to family and friends can be successful
Lending money to family and friends can be profitable -- and it doesn't have to ruin you relationship.
Individuals like to lend money to people that they knew and to help out loved ones that need a loan. Whether they have extra money to lend or they are lending money that is important to their individual budget, they want to be paid back.
There are many reasons why people lend money to friends and family. A father lent money to his daughter to pay off credit card debt. The interest he charged her was less than a market rate that she would have had to pay to a bank but more than he would have earned if he left his money in a bank savings account. Currently, the daughter would have had to pay a market rate of approximately 6% while the father would have earned about 1% in a savings account. The interest charged on the loan was 3% - so both the father and the daughter benefited for the loan relationship.
Often, a personal relationship between the lender and the borrower can help guard against the borrower defaulting on the loan. The Father made it clear that he wanted to have his daughter repay the loan. There were other family members and he did not want to set a precedent for other potential loans that he might want to make.
To help make sure that both he and his daughter understood all of the understandings surrounding the loan, they decided to create and sign a promissory note. They used www.One2OneLending.com to help develop their promissory note. The website also has a Resource Center that guided them through the process of choosing the rate and the term.
Fights are not productive
Lending money to friends and family can be one of the fastest ways to ruin your relationship. When lending or borrowing money is important to get it in writing and it doesn't need to be confusing with the help of One2One Lending.
Says Laura, the daughter that borrowed the money, after I graduated college, I had $6,400 in credit card debt. I knew that I could ask my parents to help me refinance this debt, but I wanted to prove to them that I could be professional and that they would be paid in full and in a timely manner. One2One provided a promissory note that allowed me to give my parents a risk free loan that they could collect a small interest on. Using One2One, my parents were able to feel comfortable about helping me refinance my debt, knowing that our loan agreement was in writing. I was able to refinance my loan, with low interest. I really felt a sense of pride being able to present my parents with a professional loan agreement that offered them an opportunity to help me out, free of risk!
Individuals like to lend money to people that they knew and to help out loved ones that need a loan. Whether they have extra money to lend or they are lending money that is important to their individual budget, they want to be paid back.
There are many reasons why people lend money to friends and family. A father lent money to his daughter to pay off credit card debt. The interest he charged her was less than a market rate that she would have had to pay to a bank but more than he would have earned if he left his money in a bank savings account. Currently, the daughter would have had to pay a market rate of approximately 6% while the father would have earned about 1% in a savings account. The interest charged on the loan was 3% - so both the father and the daughter benefited for the loan relationship.
Often, a personal relationship between the lender and the borrower can help guard against the borrower defaulting on the loan. The Father made it clear that he wanted to have his daughter repay the loan. There were other family members and he did not want to set a precedent for other potential loans that he might want to make.
To help make sure that both he and his daughter understood all of the understandings surrounding the loan, they decided to create and sign a promissory note. They used www.One2OneLending.com to help develop their promissory note. The website also has a Resource Center that guided them through the process of choosing the rate and the term.
Fights are not productive
Lending money to friends and family can be one of the fastest ways to ruin your relationship. When lending or borrowing money is important to get it in writing and it doesn't need to be confusing with the help of One2One Lending.
Says Laura, the daughter that borrowed the money, after I graduated college, I had $6,400 in credit card debt. I knew that I could ask my parents to help me refinance this debt, but I wanted to prove to them that I could be professional and that they would be paid in full and in a timely manner. One2One provided a promissory note that allowed me to give my parents a risk free loan that they could collect a small interest on. Using One2One, my parents were able to feel comfortable about helping me refinance my debt, knowing that our loan agreement was in writing. I was able to refinance my loan, with low interest. I really felt a sense of pride being able to present my parents with a professional loan agreement that offered them an opportunity to help me out, free of risk!
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