With a plethora of lending options available out there, most people refrain from taking a loan from their known ones. This is mostly because they don’t want to mix money with relationships, even if all due caution is exercised.

However, there are times when you aren’t left with many lending options and are forced to turn to your friends or family for a personal loan. This could be because of an array of reasons.

Know When Should You Approach to Family for Money

Often referred to as private loans, family-friend loans are not as uncommon as you might imagine. They are almost the same as a bank loan. You will need to think carefully about whether you can repay a personal loan and can cope with the circumstances if you can’t.

There are certain situations in which borrowing from family makes sense. For example, taking a loan from a bank often requires a lot of documentation. Some other situations may include (but are not limited to):

1. Need Capital Quickly to Cover Emergency Expenses

One of the reasons why it’s a good idea to ask your loved ones for money is that they will not make you wait for days to approve your loan. They are most likely to conduct verification quickly and grant you the loan the very next day.

2. Have a Poor Credit Score or History

The lending criteria are quite different from other types of loan processes. For instance, your family members won’t rely on your borrowing history before they agree to a loan. So, poor credit scores are not an issue when it comes to borrowing from family.

3. Need No Pitch to Prepare

It’s important to notice that your family members and friends already know your character and circumstances. This simply means that they are less likely to need a detailed business plan when lending a personal loan. As a result, you won’t need to prepare a pitch.

4. Can’t Afford High-Interest Rates

Interest rates are generally low for personal loans. In fact, some family members won’t charge anything. Even if they do agree on an interest rate, it is most likely to be lower than traditional loan rates. This can save you money over the course of a loan.

5. Need More Flexible Repayment Terms

Because you are not getting money from a bank, there is greater flexibility when it comes to the repayment plan. Unlike traditional lenders, your family may be a bit more lenient if you don’t make the repayment on time. This will help you spread the repayment schedule across several months, especially during difficult financial times.

In Conclusion

So, if you’re also caught in one of these situations, approaching your family or friends can be a good alternative to traditional sources. However, keep in mind that money can be thicker than blood. This simply means that it can ruin relationships if not taken care of. That’s where the Janji-Ku app can help you better manage family-friend loans.

Download the app now!