{"id":165,"date":"2018-04-16T06:49:33","date_gmt":"2018-04-16T06:49:33","guid":{"rendered":"https:\/\/blog3.indifi.com\/?p=165"},"modified":"2019-08-13T07:43:40","modified_gmt":"2019-08-13T07:43:40","slug":"3-reasons-borrowing-from-friends-family-a-bad-idea","status":"publish","type":"post","link":"https:\/\/www.indifi.com\/blog\/3-reasons-borrowing-from-friends-family-a-bad-idea\/","title":{"rendered":"3 Reasons Why Borrowing From Friends And Family Is Always A Bad Idea"},"content":{"rendered":"\n
\"3
3 Reasons why Borrowing from Friends and Family is Always a Bad Idea<\/em><\/figcaption><\/figure><\/div>\n\n\n\n

When it comes to friendships and relationships, \u201cNeither a borrower nor a lender be.\u201d<\/em> A famous extract from Shakespeare\u2019s all-time popular drama, Hamlet<\/em>, here, Polonius<\/em> shares this advice with his son, Laertes<\/em>. In the next lines, the Bard further explains why borrowing from friends and family members is always a bad idea. He says, \u201cFor the loan oft loses both itself and friend.\u201d<\/p>\n\n\n\n

This Shakespearean advice of centuries ago holds true even today.<\/p>\n\n\n\n

Reasons why you shouldn\u2019t borrow from friends and family<\/em><\/strong><\/p>\n\n\n\n

There are times when you require capital for your business, need a small sum of cash to tide over emergencies, to meet your personal requirements be it buying the new Smartphone in the market or going on a long-due family vacation.<\/p>\n\n\n\n

In such situations, it\u2019s common for borrowers to turn to friends and family to help them. After all, isn\u2019t that what friends are supposed to do? To have your back in an emergency?<\/p>\n\n\n\n

Collateral Free Business Loan<\/a><\/div>\n\n\n\n

A big NO!<\/strong> Here are three reasons why borrowing from friends and family is always a bad idea.<\/p>\n\n\n\n

1. You put your relative or friend in an uncomfortable position<\/em><\/strong>\u200a\u2014\u200aThey might not have the spare cash to lend you or don\u2019t want to give you. Whatever, be the position, they don\u2019t feel comfortable saying a NO to you. This puts them in an uncomfortable position and could lead to your friend avoiding you.<\/p>\n\n\n\n

2. Social outings become awkward<\/em><\/strong>\u200a\u2014\u200aEvery time you see the lender in a social outing, the situation becomes highly awkward. You\u2019re embarrassed about the person knowing your financial position, and the lender doesn\u2019t know if to bring up the topic or not. This leads to walking on eggshells for both the lender and the borrower.<\/p>\n\n\n\n

3. You may end up spoiling the relationship forever<\/em><\/strong>\u200a\u2014\u200aLet\u2019s assume that you\u2019re unable to repay the loan. Or, the lender urgently requires the amount and asks you to repay immediately. Cash is a potential issue that is capable of ruining even the strongest relationships.<\/p>\n\n\n\n

Summing it up, borrowing from friends and family is never a good idea.<\/p>\n\n\n\n

Also Read: The Best Ways Woman Entrepreneurs In India Can Avail Business Loans <\/a><\/p>\n\n\n\n

The Alternative\u200a\u2014\u200aBorrowing via Formal Channels<\/em><\/strong><\/p>\n\n\n\n

Ok, so what do you do, when you have cash requirements? Is there a better alternative to borrowing from friends and family?<\/p>\n\n\n\n

YES!<\/strong> You have plenty of options like digital lenders, banks, and other financial institutions. All these are in the business of lending loans to customers. It\u2019s organised and formal.<\/p>\n\n\n\n

The benefits of borrowing loans from organised lenders are many. Some of the significant advantages are:<\/p>\n\n\n\n

1. You can enjoy tax benefits.<\/p>\n\n\n\n

2. Borrowing and repaying the loan on time does wonders to your credit score.<\/p>\n\n\n\n

3. Since it\u2019s a regular commitment, you have the added incentive to repay your loan quickly.<\/p>\n\n\n\n

4. You can avail even large sums of money, depending on your income levels.<\/p>\n\n\n\n

5. Above all, it\u2019s a strictly professional relationship, meaning you don\u2019t lose any friendships in the process.<\/p>\n\n\n\n

Also Read: 4 Best Types Of Quick, Short-Term Business Loans That Every Business Owner Should Know <\/a><\/p>\n\n\n\n

Here are a few tips to help you get the best deal when you borrow via Formal Channels<\/strong><\/p>\n\n\n\n

1: Choose the right loan type<\/strong><\/p>\n\n\n\n

Personal loans, loans for businesses, loan against property, home loans are just some of the common types of loans available in the market. Do your research and choose the right loan product that matches your specific requirements.<\/p>\n\n\n\n

2: Go for Secured Loans to avail better Interest Rates<\/strong><\/p>\n\n\n\n

When you provide collateral you can enjoy great discounts on your interest rates. This lowers your financial burden and makes it easy to repay your loan.<\/p>\n\n\n\n

3: Improve your CIBIL Score<\/strong><\/p>\n\n\n\n

Lenders check your CIBIL score to determine your creditworthiness. So, make sure to boost your credit score to improve your chances of securing the loan, and to enjoy better interest rates.<\/p>\n\n\n\n

4: Low CIBIL Score?<\/strong><\/p>\n\n\n\n

No worries. Turn to digital lending platforms that offer loans for borrowers with low CIBIL scores based on their business transactions.<\/p>\n\n\n\n

5: Consider taking credit in your Spouse\u2019s Name<\/strong><\/p>\n\n\n\n

Don\u2019t meet the eligibility requirements of your lender? Worry not, take the loan in your spouse\u2019s name, or you can even consider joint loans to improve your eligibility.<\/p>\n\n\n\n

Apply For Business Loan In India<\/a><\/p>\n\n\n\n

Final Thoughts<\/strong><\/p>\n\n\n\n

The Shakespearean advice of \u201cNot borrowing from friends and family\u201d <\/em>holds true even today. So, instead of souring relationships and ruining friendships, approach formal lending channels and meet your cash requirements, the smart way.<\/p>\n","protected":false},"excerpt":{"rendered":"

When it comes to friendships and relationships, \u201cNeither a borrower nor a lender be.\u201d A famous extract from Shakespeare\u2019s all-time popular drama, Hamlet, here, Polonius shares this advice with his son, Laertes. In the next lines, the Bard further explains why borrowing from friends and family members is always a bad idea. He says, \u201cFor […]<\/p>\n","protected":false},"author":1,"featured_media":659,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[141],"tags":[26],"_links":{"self":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/165"}],"collection":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/comments?post=165"}],"version-history":[{"count":5,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/165\/revisions"}],"predecessor-version":[{"id":1909,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/165\/revisions\/1909"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media\/659"}],"wp:attachment":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media?parent=165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/categories?post=165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/tags?post=165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}