Author Archives: Roger Frazier

Lending Money to Family & Friends are Risky: Here’s Why

Life is one big game with many obstacles and different bosses to fight against. One of the biggest challenges we go through in life is about money. Everything today seems to be revolving around it and it’s the one thing that easily comes and goes as quick as lighting. If only money could multiply as easy as humans do, right? But let’s face it, it doesn’t work that way.

 

We face different problems everyday and unexpected situations may suddenly arise, some needing more money than we can afford. If you’re one of those people who have already gathered some savings, you are probably one of the few people who are reliable when it comes to money. Sometimes, it’s inevitable for an individual to borrow money to buy something necessary or pay some dues.

Image result for lending money to friends

 

Loaning to people we know is a risky thing to do because family/friends and money don’t mix really well. Most of the time, money stains a relationship. There are pros and cons to lending them money but you have to lay some ground rules which both parties can agree on.

 

Pros

For those people who have a hard time handling money, this can be a good opportunity to  teach them to be more responsible. Both of you should set some boundaries like agreeing on a deadline and/or adding an interest. Another good thing about lending money to someone you already know is that you’ve already planted something good and maybe they can return the favor some time in the future. We never know, it might be you who will need to borrow some bucks. On top of that, helping out a friend or family member is good deed. We wouldn’t want to see someone close to us suffer when we know we can help.

 

Cons

The danger of allowing money get involved in your relationship with each other is the risk of being taken advantage of. After lending them money, they might already see you as the “family bank” and feel that it’s okay to borrow from you again next time. Not only that, it’s easy to let resentment cloud the mind once things don’t go as planned — not being able to pay on time, not following the agreement, etc. In terms of being a good family member or a good friend, we just want to help out to help them feel at ease. We tend to overextend our finances or use a  bit of our savings for them. If we don’t be careful, this will leave us bankrupt.

 

If you really have a strong principle of not letting someone borrow money to avoid conflicts and broken relationship, there are other ways you could extend a helping hand.

  1. Image result for lending money to friends

    Come up with other options to solve the problem. Money isn’t always the solution so find other ways you both can settle with. 

  2. Lend the amount you can only afford to lose. Don’t go all out when you lend money, just lend the amount that’s okay not to be paid back. If they pay you back, then good. If not, well at least you were able to help.

  3. Set some boundaries, agree on a deadline or interest and be clear about your expectations.

Bahog bilat! Baho daw kog bilat

Ako, gi-nganlan ko niya’g burikat! Gi-nganlan pako niya’g baho’g bilat, kay ni um-om kuno siya sa oten sa akong bana, baho kuno’g bilat. Nya aku kunong bana dili daw ganahan mutupad nako kay nanimaho na daw kong bilat. Unya ako pung anak, kawatan.

Ingon pa gyud siya pagstorya, iya kuno ming ipa-pusil, ipapatay kuno mi niya kaming duha. Mao ng nabuhat sa akung anak, nadunggaban siya sa luyo, pero nagmahay man mi ana. Kay luoy man sad mi kung kami pa’y nahimutangan. Gisakitan ko sa iyang gibuhat. Niya nakit-an pa gyud nako siya’s banwa, pagkakita nako sa banwa, ningdagan siya. Unya wa pa siya’y dautan binuhatan sa akong bana, dili siya mudagan. Ingon pa gyud siya pagsulti, pagchupa kuno niya sa oten sa akong bana, baho kunong duga. Baho kuno ko’g bilat, engon ang bayot

The Antiquity of loan

Why a personal loan is the answer to all your financial needs

Before anything else, let us familiarize and define the true meaning of loan. A loan is something you get from borrowing through a person or may it be an organisation. The both parties will negotiate to what and when will be the debt will be pay by the debtor and if it exceeds, there will be a corresponding amount of interest as a financial compensation. Furthermore, there are many types of loans and at the same time has a specific purpose.

The negotiation of lending and paying has been visible even before with our ancestors, however it’s footprints of whereabouts are unclear and uncertain. It’s not like there’s no concrete documentation, in fact, the history was written dating back centuries ago, that shows how loan has evolved throughout each millennium.

 

Loan Approved

Frankly, the earliest form of lending was written on the bible! Can’t you believe it? The cultures of Greek and ancient Romans has shown a lending evident and it was widely visible during the early years.

However, the oldest monetary exchange took place between Babylonians and Assyrians where traders would grain loans to merchants and farmers. Although, this monetary exchange is done by the low class of the society, it still looks sophisticated as if they are doing a bureau de change.

The fact that money lending has been practised even before our great great ancestors exists, it’s evolution did not happen quickly, but it was on the late 1800’s that the powerful merchants and even churches has focused on the benefit of the interest itself, rather than the money to be lend.

 

Term Loans: What Is It and What Are Its Advantages

“Timely return of a loan makes it easier to borrow a second time.”

-Chinese Proverbs

 

 

Term loan – a financial loan compensated with standard payments until the deadline; usually last between one to ten years or more in some cases. A term loan generally associates uncertain interest rate that will have additional balance that will be reimbursed.

 

Term Loans are given on a singular basis, but are usually used for small business loans since this type of loan, can be paid over a long period of time; this type of loan is indeed appealing to new or expanding businesses since their profit is expected to raise over time.

 

What are the benefits of venturing in term loans?

 

Flexible

– Term loans are as flexible as a gymnast: its duration, amount and interest rates are negotiable even before the loan is accepted.

 

Low Interest Rates – Term loans usually have low interest rates than short-term loans, this is because of their long durations; but the interest rate in this type of loan is fixed and doesn’t change even during a lifetime of the loan.

 

Tax Advantages and Accounting – Term loans’ interest is tax deductible, so is the amounts of regular check for direct budgeting.

 

Quick Approval while Maintaining Investor Equity – When your business needs cash, fast, this is where the term loan comes in, since it can be accepted in a short period of time – anywhere from two days to two weeks which still depends on your lender. The term loan is a better and faster option than other kinds of financing, since it is a debt financing and does not affect the interest of the investors’ equity while keeping the company’s equity intact.

 

Accepting The Term Loan and Accomplishing Payments On Time, Actually Boost Credit Score – Whatever or whoever lender you chose for your business. Your business’ credit score will surely improve when you repay on time and according to the terms you agreed on; this can lead to other funding possibilities at a competitive interest rates.

Grants Practical Cash Flow To Be Used Subsequently – Term loans give your business the authority to make use of their cash flow in other areas, which also provides the money needed when you decide for a larger investment for your business. Example: the term loan can lend you and your business money for you to hire new employees, it also covers the training time your newly hired employees need and grant them to stabilize themselves in your company before actually starting to commit to the bottom line.