Regardless of the amount, there is a proper way to lend money. Even your friends can dare to run away; thus, you should be extra careful if you’ll lend them some cash. You should also ensure that they understand when they should return it. Most people may think this is silly but with the economic crisis today, it’s just right that you keep your cash intact. That is why learning the right way of lending, even just a small amount, can be of considerable help.
Lend only what you can
Lending too much can cause you debt problems. If someone wants to borrow, but you don’t have that hefty amount of cash, you can still lend him some. This will spare you from having a debt, and at the same time, and you’re helping others in your own small way.
Only lend people you truly trust
Keep in mind that every dime you have is hard-earned. Before you expect borrowers to give worth to that, you in the first place should show them that you’re giving worth to every dollar you’re earning. It’s wise to refrain from lending cash to people whom you’re not even sure if they’ll pay back or not.
Ask for a check
If your friend has a bank account, it will be a terrific idea to ask him a check that will serve as the payment. If he promises to pay on the 15th of the month, tell him to postpone the date when you can in-cash the check. It could be the 17th or 18th of the agreed month.
This way, you can ensure that he can pay you on time. If he doesn’t have a bank account though, you can suggest him to talk to his parents and use their bank account instead.
Even if, that’s only a small amount, if you’re doubtful about your friend, but you want to help him at the same time, an effective solution is to obtain collateral. Although it’s not necessary, it will safeguard you from unpaid cash.
The collateral should be fair enough or just a little over the borrowed money. It could be your friend’s mobile phone, his camera or any item he loves dearly.
Write a contract
Writing a contract is another unnecessary action to do. However, it can significantly help when it comes to asking for the money owed. In the contract, the money owed, the people involved as well as the agreed date of payment should be clearly stated.
In case the borrower refuses to pay, you can consult a lawyer and bring the case to the court. Once the borrower receives a summon, he will surely pay you before the case gets worse.
Lending money means aiding others with their financial dilemmas. However, people shouldn’t abuse your kindness. You, on the other hand, should also know how to protect yourself from irresponsible individuals. These tips can serve as a good coat of protection even if the money owed is just a small amount.