5 Reasons You Should Not Borrow Money From Family Members
If you’ve ever been in a situation where you had to borrow money from your relative, then you probably already know that things don’t always work out as planned. If the family member is someone that you are close to, then it might come across as a good idea, especially because of the favourable loan terms.
However, as appealing as a loan from a member of your family might be, it has its pros and cons. Let’s take a quick look at some of the pitfalls you need to be wary of before asking a relative for a loan.
The Pressure of Seeming Obligations
When you ask a member of your family for a loan, you might be putting them under undue pressure without even realising it. First, you are entirely sure where they stand financially at the time of being asked for the loan. You might end up making them feel as if they are obligated to provide you with the loan you are asking for regardless of their financial capacity at the said time.
Asking a family member for a loan comes with the risk of putting a strain on the relationship between you. This doesn’t always have to be the case but in a situation where there are delays in repayment, it can sour the relationship you once shared with the person. Financial dealings, especially those related to loans can lead to broken relationships even with people you are related to.
Loss of Privacy
Under ideal circumstances, your personal finance deserves topmost privacy. However, the moment you ask a family member for a loan, the privacy of your personal finance is no longer entirely in your hands.
By nature, humans are wired to gossip and no matter how much you trust your relatives, you can’t always count on them to keep such information to themselves. For example, after a couple of alcoholic beverages, tongues have a tendency to loosen up and divulge certain information that normally wouldn’t be discussed.
Therefore, if you want your personal finance to stay personal and private, you would be better off not taking a loan from a member of your family.
Things Get Awkward
Let’s be honest here! It’s a bit awkward asking a member of your family for a loan. As mentioned earlier, your personal finances are best dealt with personally.
Opening up to a family member that you are broke can put both you and family member in a situation so uncomfortable that it tows the line of becoming awkward.
Hurting Your Reputation
You never can tell how far a disgruntled family member might decide to go. He/she could go as far as informing other family members or even your friends about your failure to pay back money that you borrowed.
As expected, this unequivocally puts your reputation on the line and could come back to haunt you in ways that you probably never imagined.
Final Thoughts on Reasons You Should Not Borrow Money From Family Members
Issues involving money can be tricky to navigate when there are family members involved. For instance, a family member who loans you money might find that they suddenly need the money before your agreed repayment period and end up putting you under undue pressure.
In the same vein, you might experience some difficulty in repaying a loan due to factors out of your control and this could lead to misunderstandings that could put your relationship with them in jeopardy.
One way to avoid these glaring pitfalls is to restrict your urgent and emergency money needs to loans from lenders that have been licensed by the Central Bank in Nigeria or similar regulatory bodies depending on your current country of residence.
For instance, one great way to access money regardless of whether you don’t have a credit score or you have a bad one is to use the Credit Builder. The Credit Builder gives you instant access to the money you need whilst helping you build your credit score and creditworthiness.
All you need to get started is to create an account and you’d be on your way to building your credit score and access to even more money.