Borrowing From Family vs Loans

Discussion in Loans started by DreekLass • Oct 17, 2014.

  1. DreekLass

    DreekLassWell-Known Member

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    I would say that I was quite a proud person. I don't like to ask for help, unless I need it. Or should I say that I don't like to take offered help, unless I am to the point where I need to take the help that is on offer. I am this way especially when it comes to money. I am not sure why. But even so, rather than taking out a loan I would rather borrow the money from family members instead. I am less likely to have to pay interest if I borrow money from a family member or a friend. A loan just seems too dire to me. But then if you borrow money from loved ones, you may have to deal with a strained relationship because that person is expecting their money back.

    What would you rather do? Borrow money from a family member or friend? Or take out a loan?
     
  2. GenevB

    GenevBActive Member

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    In my opinion it's better to not be a proud person than being broke. Your family shall understand your needs and can give you extra time to restore your loan and they may even never expect it back, meanwhile banks always make their loaners pay out their credits. I would prefer asking a friend/family member for money or even save myself for a couple of years than to know I owe a bank something.
     
  3. Denis Hard

    Denis HardWell-Known Member

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    It's always better to borrow money from friends or family because they don't charge you any interest. If they lend you $500, that's the amount you pay back. Failure to repay the cash though, would kill the friendship or make you lose the trust and probably love of a family member.

    But since you'd have to pay back a loan you got from a bank or credit union, etc, doing the best you can to repay money borrowed from friends or family would save you not just money [the interest] but also the existing relationships.
     
  4. Danii

    DaniiMember

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    I completely understand where you're coming from. I often let my pride be in the way between me and my happiness, but when it comes to being flat out broke, I'd rather ask a family member than get it on my credit history.

    My family can wait indefinitely for the money back while the bank might cut the branch right underneath you.
     
  5. eagletal88

    eagletal88Active Member

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    I actually would rather borrow money from a bank before asking a friend or family. First reason would be the fear of having my relationships change if I owed money to a friend or family. I have been on both sides before, and it always seems something is "different". Like you think your friend is taking too long to pay you back, or you see your friend making large purchases instead of paying you back. Of course it could all work out with no issue, but I think the risk is too great to hurt your relationship.
     
  6. xTinx

    xTinxWell-Known Member

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    I'd rather loan from a government institution rather than borrow from my family to discipline me and force me to really pay my debt. There's such a thing called "familiarity breeds contempt." Because we're too familiar with our family, we tend to not take things seriously. We might even go so far as to forget the money we borrowed from them, making "blood is thicker than water" as an excuse.
     
  7. JosieP

    JosiePWell-Known Member

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    Depends on the situation. If I had credit issues, I would take my issues and use them to better myself. Pay the consequences by paying off a loan to better my credit. Not all quick and dirty, but per the agreement, so it stays on my credit to show I'm reliable. It will cost you more, but will help you too. Your family won't. Without credit issues... depends how much I needed and how fast. I'd want to find any way to get my hands on the money without needing them; selling things or reselling things. A quick pay cheque from a crap job lol. If all else failed, family is there to hold us up whenever we need it. It's not like you're using them as a crutch and nobody should suffer in any way because of pride.
     
  8. Gavin

    GavinMember

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    I agree with a few of the others up there, the borrower is slave to the lender and that kind of thing will change your relationship with the friends/family. Money will change everyone because it has a value that's immediate, tangible and shackling.

    Find a credit union or use something like lending club if you need a loan, but I'd be wary about using family for something that would take more than week or two to pay back.
     
  9. owesem75

    owesem75Active Member

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    This is a very tricky question but both about borrowing money.. hmm, I personally do not want to borrow from my family (including relatives), although I am sure they can understand.. but the problem is.. I have some relatives who borrowed money from me.. and, well... some of them suffered from amnesia.. LOL. although it is not a big deal for me, the problem is.. the relationship has changed... and if I am in the borrowing side.. i do no want to break the family relationship..

    but would this mean i have to borrow from others?? well... it depends. maybe if it is for business.. yeah i would borrow from a bank.. otherwise.. i will have to work hard to get those extra cash that I need to avoid borrowing from anyone!.
     
  10. GemmaRowlands

    GemmaRowlandsActive Member

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    I always try my absolute best not to borrow any money if I can get away with it, because I know that if I can't afford something, I just shouldn't be buying it at all in the first place. But sometimes there are times that it can't be helped, and at those times I do very much like to try and borrow from family rather than getting the money from the bank. Because they would charge me interest, whereas friends and family are much more likely to let me have it without charging me the same amount - although I do like to give them little something to say "thank you" at the end of it!
     
  11. goldenmaine

    goldenmaineActive Member

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    If ever I am short of money, I borrow from family instead of taking a loan or borrowing from friends. I am close with my family and they have been lending me money whenever I am in need because they already trust me and I am always paying them back. I do not like borrowing from friends because they are less understanding than my family. Sometimes I take too long to pay my debt, but when I borrowed the money from my family, they do not care of the time but as long as I can pay them back. I do not go for loans because of the interests and it makes me lose more money because of this. I am fortunate to have a supportive family and I make sure I do not abuse their kindness by paying them back full and on time. re are no bike lanes here and the bikers are always facing danger when riding along the highway. If bike lanes are impossible to place then I hope they will have stricter rules in respecting cyclists.
     
  12. DonnaIReilly

    DonnaIReillyActive Member

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    I would rather take a loan out to be honest. It's just with family it can become difficult. They want the money at certain times. With a loan I would just set up a direct deposit with the bank and make sure it went out at a certain time. I think if you budget for a loan then you shouldn't occur any problems. Loans are better because you don't feel like you owe family members anything then.
     
  13. johndee

    johndeeMember

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    Well, for my case, I would say it will depend on two scenarios. How soon I need the money, and the amount I need.

    For a quick fix of not so large amount, I would be comfortable approaching a friend or a family member. For a large amount, I would better try a bank.

    Its easy to get a small loan from a friend or family, which you can equally easily repay. But not so if you are in need of a large amount.

    An individual may not find it easy to avail a large amount considering that they also have personal financial committments. But a bank is in the business of lending.

    Other than having a strained relationship in case of default or delay, an individual will oftenly want their money back in total. No interest asked, but they will expect their money in full. This could stain someone financially.

    While you will have to repay a bank loan with interest, repayment is spread over a longer period. That could give you peace of mind and time time to work on repaying.
     
  14. xTinx

    xTinxWell-Known Member

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    Well familiarity breeds contempt. If you're going to borrow money from family, make sure you don't abuse the trust and confidence they placed in you. Strive to pay your debt on time and with all due discipline so as not to make your family members feel like you're abusing or taking advantage of them. That's all there is to it, really.
     
  15. Corzhens

    CorzhensWell-Known Member

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    When we found this house with a for sale sign in 2001, we didn't expect to be able to buy it because the tag price was 3 million and our loanable amount with the bank is only 1 million. But when I inquired, the sign on the gate was more than a year and they had decreased the selling price to 2 million, presumably because there were no buyers. I haggled a bit until the owner succumbed to a final price of 1.6 million pesos. That's still a bit high over our budget.

    We have a savings of more than 100,000 so we had to borrow around 500,000. We are fortunate that my father-in-law who was in the US at that time lent us 400,000 with no interest. The remaining 100,000 we borrowed from lenders with high interest. I don't think we would have paid all those loans if the 500,000 had a monthly interest.

    PS. We now own this house, with the mortgage to be fully paid next month.
     
  16. ziska

    ziskaMember

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    Borrowing from family is the way to go and should be your first option. I do realize that it may not be possible for everyone, though. Other ideas are selling something, or getting a temporary job, or working on-line to earn some cash. You could also try Go Fund Me or peer to peer lending sites such as Prosper or Lending Club. Borrowing from payday lenders, signature loans, no collateral loans etc. is a plague in this world. People find themselves enslaved by debt in no time flat. Many people recoil at asking family for a loan due to their own pride, but if you can afford to pay back a commercial loan PLUS interest, why not just abandon your pride and make that arrangement with your family member, without interest? (of course, assuming they have it to loan)
     
  17. iRoxas

    iRoxasNew Member

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    I think it's better to ask family because they'll understand if you're going through a difficult time and if you can't pay them back at that moment. But if you ask the government, then won't care if you're going through something, and they'll keep on adding interest so they could keep stealing money from you. It's really despicable if you think about it but the world is more of a bad place than a good place so what can you expect?
     
  18. cluckeyo

    cluckeyoActive Member

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    I have been in situations where I borrowed from family, but I don't like it. It does strain the relationship. Instead, with credit card debt, I like to make balance transfers every so often. That way the interest goes away and I have a year to 18 months to pay things off without incurring any finance charges. I can put almost anything on a credit card and I have a couple who offer me these deals from time to time. Most recently I have been reorganizing the finances so that we can remain debt free. In other words, we won't be carrying balances on cards any more. Only paying the balance off in full each month. We are doing this by establishing an emergency fund which should cover just about every possibility.
     
  19. DreekLass

    DreekLassWell-Known Member

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    True. But what about if you don't have the money to pay out straight away. Then there are going to be problems with interest and such. Did I mention that I hate the way the banking system works? It is quite simply put, a massive scam that we all just put up with. It's weird. But yeah, rather than have to worry about having the money there on the card to pay out right away, I'd rather loan from family. They may give you a few digs at family parties about the money you owe them, but they aren't going to come and repossess your belongings.
     
  20. atlmom5

    atlmom5Active Member

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    I don't like either situation. I'll rather sell something or take on an extra job if I need help. Now, if a family member is giving me money as a gift, I'll definitely take it, but the loan thing doesn't work for me. In fact, I've had family and friends who needed a loan, well, I don't give out loans, however, I've never told them that, but if I have the extra money to give to then I'll just give, and if they want to pay me back then they can, but if not, so be it. I rather give out a gift than a loan.
     
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