Studies reveal that 61% of U.S. adults have made a personal loan with the expectation of being paid back. Among them, 59% have reported a negative experience, such as losing money. Despite all this, borrowing from friends and family is a much better option than turning to a traditional loan. 

Learn How to Borrow Loans from Friends and Family

No matter what the amount, it’s never easy to ask for a loan from people you know. However, how you’re going to do it can make all the difference. Follow these tips to successfully ask for money from your family, relatives, or friends.

1. Determine Your Needs

Even if your family or friends have the willingness to help, you still need to determine your needs and make a good case for why you need their financial assistance. Write out the exact amount you need to borrow. Plus, explain what you need the money for.

Let them know exactly why your current budget can’t cope with it. This will help them better understand your financial situation and offer the right solution accordingly.

2. Get Everything in Writing

Loans from friends and family usually fail because one person has a different expectation than the other. The key to any successful money exchange with family or friends is clear communication.

Put the agreement in writing, so there are no conflicts and surprises later. You may feel uncomfortable to write out a contract with a friend or family, but you will need it.

3. Create a Repayment Plan

Develop a repayment plan to illustrate how you are going to pay back the money in a specific period of time. Be clear about how long you are going to need the money.

Consider repayment terms, including the interest rate and timeline. You can even prepare a budget for your expenses and subtract them from your income to make a reasonable monthly repayment.

4. Offer Something in Return

While you’re asking for financial assistance, you can offer your free time to help the friend or family. If you don’t have a job to cover your financial needs, offer to babysit, clean, cook, or water the lawn for the person helping you pay your bills.

The person will feel better accepting your help if you can offer something in return. This may also help them consider accepting no interest rate when you make the repayment.

5. Be Respectful

Give them some time to consider your request. Leave them with notes about your current financial situation and your future plans to gain financial independence. Following up the discussion with a friendly visit that’s not about the money could be a positive move.

If you do receive help, make sure you show your gratitude. And don’t forget to check in frequently to let them know that you’re on your way to paying it back.

Go Digital With Janji-Ku!

If you are all set to borrow a loan from friends and family, why not go digital this time? Use the Janji-Ku app to streamline the process of lending. Manage the payment records digitally and skip the mundane work that comes with lending money to friends and family. 

For more info, download the app now!