How to Borrow Money from Family and Friends
Borrowing Money From Family or Friends
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Borrowing funds when needed can be very helpful in a time of financial need, but putting the borrowed funds to use in a negative way can create a major problem. Knowing how to use the money that you have gotten in the appropriate way is important to stay on top. When you borrow money it is important to do what the money is intended for that way you do not blow it.
- Using the borrowed money to Invest
When you used the borrowed funds to invest you are risking the money on a potential loss. If the money is lost then you will have to pay back the borrowed funds that were invested. It is a gamble to invest borrowed money because it is not a sure thing.
- Borrowing money to pay off debt
When this situation happens a person may be trying to consolidate their debts, but at the same time they are creating a new one. Depending on the amount borrowed it could hurt you in the long run depending on the rate you have and how long it is going to take to pay back the borrowed money.
- Purchasing big ticket items
When there is something one wants bad enough they tend to get the funds they need to make the purchase. This can be very dangerous because they are now using money that they don’t have to purchase a product. When the time comes to pay for the product, which they still will have to do, they can find themselves in financial ruins.
- Taking out bad loans
When you borrow money it is important to get the funds that you need at a reasonable rate. When the rate is high then you pay more money for the loan when you could have saved money by taking the time to look at different lenders. The wrong loan can lead you to trouble making payments that are outrageous as well as have possible effects on your credit rating to other potential lenders.
- Borrowing money to lend to another
If a friend or family member is in financial trouble a lot of times people want to do what ever they can to help the person out, but you should not compromise your financial well being to do so. If you have extra money that can be lent then it could be helpful, but borrowing to lend to another is risky. Should the person not be able to pay you back then you will have to pay out of your pocket for the money that was borrowed.
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