Southern New Jersey Overlook

Many people, while they may be very careful in following proper guidelines for giving out loans in their business and professional dealings, don't always practice the same level of discretion with personal friends and family members.   However, it can be a cause for misunderstandings and strained relationships when problems with repayment arise.

Here are some basic guidelines for reducing misunderstandings and minimizing problems, from an article "How to Hassle the Pal Who Owes You" (Bankrate.com/MSN):

Full Article


Article Summary Guidelines:  It's important to always make it official by writing down, no matter how informal (even a napkin if necessary), the following points and include the signatures of all participants:

The loan amount.
The date of loan.
The date or schedule of repayment.
Rate of interest (if any).
Collateral (if any). 

It is also important to never give a loan to someone and not tell your spouse; and never, ever co-sign a loan.

The article suggests what to say and do under different situations when the person is overdue on their repayment, pointing out that it will surely put a strain on relations, if not outright destroy them and the sooner a problem is addresssed the less damage can be done to a relationship.  If someone is not able to repay, it may be a good fallback to allow payback with services such as babysitting, yard work, painting, etc.

That old saying, "he who lends money to a friend stands to loose both", still rings true today. 
 
 
 
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