By: Natasha Archary
Loaning people money, especially when it’s family and friends may seem like the right thing to do when they need your help, but do you help them with a favour if they haven’t spoken to you in years?
You are not part of their circle when it comes to invites to social events but the minute they need help, you’re the one they fall back on.
What usually happens when you do help them out, especially financially, you’re given the run around when you want your money back.
Listeners shared how they learned the hard way that helping people who may be struggling will show you flames.
While people will do anything to convince you to give them a “loan”, once they have the cash they need from you, that’s when the grand chase of trying to get your money back begins.
It’s the classic case of cat and mouse, where the mouse in question is the friend or family member who is now trying desperately to evade you, so they don’t have to pay back the money.
It’s such a common issue that Skhumba maintains he does not go down that road.
“Nope. I’m not playing that game, you want to borrow R10 000 from me, I don’t have. That’s a lot of money. How are you going to pay me back?”
Skhumba says he refuses to loan money to people because they never have it when you need it back
Borrowing money from family or friends is often the easier way to get out of an unforeseen financial burden, and doesn’t involve lengthy processes, and paperwork, not to mention high interest rates.
But, from the number of examples listeners shared with the Drive 959 team, putting in terms and conditions before loaning people money may be necessary.
Having an agreement for repayments in writing can help open a case of theft if the person decides to dodge you when you’re trying to get your money back.
Listen to the conversation on Kaya Drive:
Remember these points before you loan money to people:
- Loaning people money, especially family and friends can lead to financial problems for you and your can potentially damage the relationship
- Consider how the loan will affect you financially and emotionally
- Get it in writing
- Lend money only to people you can trust
- Limit loans to what you can afford
- Don’t allow guilt to drive your decision
- Would they do the same for you if you need help?
- Refrain from co-signing someone’s loan because it will affect your credit score when they fail to make repayments
Also read: SA’s competitiveness takes a dip
