Should You Borrow Money From Friends or Family?

Have an unexpected expense? Between jobs? Don’t have quite enough money saved for a down payment on a home? Whatever the reason, if you’re in a tight financial situation, you might consider borrowing money from family or friends.

But should you borrow money from friends or family?

There’s more than money to consider before you ask loved ones to help you out.

When money is involved in a relationship, feelings of resentment, trust issues, and differences in opinion can result.

Besides, about half of those who borrow money, from those their closest too, never pay back everything they borrow.

It’s understandable why many people don’t recommend loaning money to friends and relatives. Not only are the loans not likely to get repaid, but it can cause relationships to deteriorate.

Yet it’s possible to make it work. When everyone involved in the loan is open and honest, everything is spelled out, you have a good relationship, and you have a signed agreement, it can work.

So, should you borrow money from friends or family? The answer is: “It depends.” Deciding whether to borrow money from family or your bestie is a difficult decision.

It depends on the situation and your relationship with the person from which you borrow. Explore your options and, if you decide to borrow money, take every step to do it the right way from the start.