How to Squeeze Money from Your Family
Posted March 10th, 2010
by PersonalLoans.org Staff
We’ve all been there. There’s too much month left at the end of the money. You’re facing bills that you just can’t pay. Your credit sucks, so it’s not like you can mosey into your local bank and walk out with a check. You’re almost out of options.
Lucky for you, there’s family. Yes, asking to borrow money from your family is never easy. It’s embarrassing. In addition to whatever other baggage you might have going on, it can be downright humiliating. It’s like admitting that you’re not able or responsible enough to take care of your own financial issues.
Here are some tips to help the process go more smoothly:
Pick the right person to ask. Don’t ask someone for a personal loan who doesn’t have any extra money, or who’s going through a financial hardship just because you know they’re likely to say “yes.” That’s just taking advantage, and you don’t want to be that kind of person. Pick someone who can afford it.
Ask for what you need. Don’t ask for less than what you need because you’ll just be back asking again next month. Figure out, realistically, how much you need and ask for that. If you think it’s too much for one person to loan you, ask several different family members until you get the amount you need.
Have a repayment plan. Don’t just vaguely agree to “pay it back as soon as you can.” Set out a plan with specific dates and specific amounts. That helps you as well as the person lending you the money know what to expect.
Repay promptly. No, your uncle Jed isn’t likely to report you to the credit agencies for not paying back the $300 you used to get a new muffler on your Pinto. But, not paying back promptly and in the agreed-upon timeframe can damage your relationship. Credit reports clear up. Relationships take a heck of a lot more to rebuild. Don’t wait for the deadline if you can’t make a payment. Talk to them as soon as you realize you’re not going to be able to make it.
Put it in writing. You can get a loan agreement relatively cheaply at an office supply store. Work up a legitimate agreement. This will help your family member be more confident in your desire to repay the loan, and will also give them recourse if you don’t.
Photo via Orin Zebest