Should I Lend Money to a Friend or Family Member?
Should I Lend Money to a Friend or Family Member?
Loans between family members can be tricky. If you lend money to anyone, including friends and family, it is important for both parties to hire a Loan Agreement that obviously sets out the basis upon which money has been lent. This makes it easier to enforce the terms on which the loan was made and easier to show that it was in fact a loan and not a gift, upon which the IRD may assess gift duty on you as the lender.
Before accord to lend money to your friends, openly communicate to them your pertain and expectations. Remember, you should only lend money you feel confidant will be paid back. If you are low on money yourself you merely may not be in the situation to lend money. You actually should never lend money that you need yourself.
If something occur and your friend or family member can’t pay back the money, you’ve put yourself in a dangerous position. A friend or proportional that cares about you should understand that and not make you feel force to lend money to him or her.
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