Tips for Providing Financial Assistance to Family Members

What do you do if you have a family member or relative who is having financial problems due to the failing economy? If they ask for your help are you obligated to lend them a hand? Should you lend them money to help them pay a few bills? Well, legally, you are not obligated but as a family member, you may want to help them out if at all possible. After all, if you were in that situation rather than them, wouldn’t you appreciate their help?

Anytime you get into financial matters you are treading on thin ice. Things can get very touchy when families are dealing with financial help among themselves. Many family relationships have been shattered over lending relatives money. In fact, the thing that families argue over the most is money. But it does have the advantage to borrow from a family member. For one thing, you can keep the entire thing quiet. Going to a bank sort of puts that information out there even though the bank doesn’t go broadcasting it around. You are still dealing with strangers. Besides, it is probably better to pay interest on a loan to a family member rather than to a bank. Although if you still could not find anyone then you can connect with some of the  Licensed Money Lender in Singapore that will help you as you might get terms of the loan according to your requirements. 

You should never go to a family member for a loan unless you see no other way out. Take a hard look at your finances. Have you cut all the extra expenses that are possible to cut? Curtail any non-essential expenses and try to cut down on things that can be shaved back a bit. If you are lending the money, be sure that you can afford to do such a thing. If you cannot, then don’t do it. You may put yourself in a financial hole trying to help someone else out.

Decide what the ground rules are for the loan right from the start. Make it clear from the beginning whether this money is a gift or a loan. If it is a gift and does not need to be repaid, then fine. But if it is a loan, then guidelines need to be established as to interest and the time by which the loan should be repaid. All of this should be written down and should be signed by all parties involved. Then it is clear that there is no misunderstanding about any of the terms.

When borrowing the money make sure that you use the money for the purpose stated in the agreement. If it is to pay medical bills, don’t go out and buy a new car with it. You won’t be able to hide what you spent it on if you got the money from a family member. So, be honest, don’t invite trouble.

Borrowing money from a family member can be conducted in a civil and workable manner. As long as both parties are honest and are willing to lay out the terms at the outset, this activity doesn’t need to throw turmoil into your family life.