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If you have decided to lend money to a family member or a friend it is always best to set the tone of the loan right from the start.
What do I mean?
Often, when we are dealing with a close friend or with someone from the family, we have a tendency to not take the practice of lending money so seriously.
Usually, when the subject of lending money comes up between family and friends, most often it is over a lunch, or while having drinks at a bar, or maybe even while watching a game on television.
The mood is often not one of a serious nature.
Let me tell you, when you, as a LENDER, are getting ready to hand over your hard earned cash, you would be well advised to make the terms of the loan firm and clear to the borrower and express to him or her that you expect to be paid back.
In fact, if at a lunch, wait until both of you have finished your meal.
If at a bar, postpone the final deal until the next day, when both of you are sober and have cleared your minds and are in a somewhat more formal environment.
If watching a game, turn off the television and focus on the topic at hand and seriously discuss the terms of the loan.
By creating this sense of seriousness between the LENDER and the BORROWER, you are in affect relaying to your family member or friend that you are willing to help them in their time of need, but you are also fully expecting to be repaid as agreed.
Make it crystal clear to your borrower that you do indeed expect to be repaid so that you too can be able to pay your own bills and meet your own financial obligations.
Express to your borrower that you will need to be repaid so that you are able to put food on the table for you and your family.
In simple terms, do not ever give the impression to your friend or family member that the loan can be repaid at his or her own convenience, because if you do, it may never be convenient for them to repay you the loan.
Always treat the practice of lending money as a serious business transaction and you could very well eliminate the hassle and aggravation of trying to collect the money that is rightfully owed to you by your family member or friend.
Remember, it is always best to set the tone of the loan right from the very start.
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