2007-01-27 07:16:43 · 6 answers · asked by bubba 4 in Business & Finance ➔ Personal Finance
Well that completely depends on how generous you are.
Sit down with the family member and discuss the reasons for the loan. Help them figure out their budget by adding together all their monthly expenses and subtracting them from what they earn every month. If your loan will help them pay off a debt don't include that debt in your figures.
If there is nothing left over, they won't have money to pay you back monthly, you'll need to decide if you will take defered payments, that is, loan them the money now to be paid back much later.
If there is money left over that is the maximum they will be able to afford per month. Divide the total loan by how much they'll be able to pay to see how long it will take them to pay you back. Is the length of time agreeable to you?
The other thing you want to think about is if you will charge them interest. If you do you'll want to agree on a percentage and calculate that into their payments. There are calculators on the web that can help you with all these calculations. (one is listed below)
Lastly, get everything in writing, this will protect both of you in case something happens. You may think it is silly at first but if they decide not to pay you back you'll be happy you have a signed document that can back you up if it ever gets to court. They'll also be protected if you decide that you want to charge them 10% interest instead of the 5% you agreed on when you started.
Good Luck!
2007-01-27 07:28:46 · answer #1 · answered by Peter R 2 · 0⤊ 0⤋
The limit should be ZERO...
It's never a good idea to loan money to friends or family. The borrower is slave to the lender. It changes the relationship.
2007-01-28 23:36:01 · answer #2 · answered by Jen G 5 · 0⤊ 1⤋
Only loan an amount you don't need to get back because you probablty won't.
2007-01-28 00:02:48 · answer #3 · answered by sm4125 3 · 1⤊ 1⤋
Yes, if you don't have the kind of money that they are asking for, then just lend them the money you think is right for your current money situation.
2007-01-27 15:26:13 · answer #4 · answered by I ? Colbert 4 · 0⤊ 2⤋
Yup, don't loan more than you can give away.
2007-01-27 15:25:31 · answer #5 · answered by Anonymous · 1⤊ 2⤋
Yes If you don't have don't give it to anyone else. If its going to set you back don't do it.
2007-01-27 15:22:00 · answer #6 · answered by redjake 3 · 1⤊ 1⤋