How To Deposit Large Sum Of Money From A Friend Loan

When 32-year-old Sourabh Thanekar's friend badly sought money from him for a medical emergency in the family, the Ahmednagar-based finance executive did not think twice nearly parting with Rs 40,000 immediately. Two days later, a shocked Thanekar realised his friend had lied and had taken the money only to buy the latest model of a high-end smartphone.

While Thanekar was unfortunate enough to take been conned by someone he considered a friend, lending money to friends and relatives is common practice in our state. From pocket-size paw loans given to meet real and imagined emergencies to large sums meant for setting up business ventures, money changes hands with little or no paperwork and an ofttimes misplaced sense of trust.

The open-ended nature of the understanding usually ends in defaults, with coin lost and a relationship cleaved in the procedure. While it is hard to say no to requests for money from loved ones, here'south how you tin handle the situation without burning any bridges.

Before you lend money, ask yourself if you can afford it. Call back that you are unlikely to getthe money dorsum for a long hereafter, if at all. Figure out if you lot can bargain with an emergency with any you have left. If you are working towards a financial goal such equally buying a business firm or saving for your child'southward didactics, consider to wha extent your generosity can set your plans back.

Manoj Kalwar, 31
Lent Rs 40,000 to a friend who claimed a medical emergency and instead blew the money on partying.
"Today, I cross-check with common friends and relatives earlier giving anything to anyone."

Says Tarun Birani, Founder and CEO, TBNG Upper-case letter Advisors: "Continue 5% of your savings in liquid funds to assist dear ones in the consequence of a financial emergency." Allocating a fixed portion of your coin to cater to such situations won't affect your other goals. Even if you know the borrower well, do a due diligence. Don't accept their reasons for needing the money at confront value, like Thanekar did. Mumbai-based IT engineer Manoj Kalwar found himself in a similar state of affairs.

Hounded by a friend who wanted money for a family member's medical treatment, Kalwar lent him Rs 40,000 over three months in 2022. Afterward he learnt that his friend had taken Rs 1 lakh on the same pretext for some others likewise. Only, no one ill in his family was ill. He had blown the money on luxuries. Not the one to surrender, Kalwar pursued his friend for vi months and recovered the amount. "I keep my emotions aside while lending money at present. I besides cross-check with common friends and relatives earlier I lend," Kalwar says.

Shounak Potdar, 31
Gave Rs fifty,000 to a friend as downpayment for a automobile.
"I now discuss the repayment schedule so that the borrower understands that I demand the money in future."

According to Viral Bhatt, Founder and Advisor, Money Mantra, compulsive borrowers are to be avoided. "Acquire to decline requests after lending coin a couple of times. Also, politely enquire them to first repay the outstanding corporeality when they approach you for new loans," he says.

Another factor to consider is how shut you are to the person seeking the loan. Sapna Tiwari, Chief Financial Planner, Rupeewiz, says, "Enquire yourself how long y'all have known the person and how oft you lot interact. It will help y'all decide whether the person is really a close friend or an acquaintance."

The reasons for borrowing can appear pressing sometimes. Information technology professional Koyel Ghosh found herself helping her friend, who had lost a job, pay off an education loan EMI of Rs 25,000. She never got the money back. "Check the financial status of the borrower earlier you lend," she says today.

As the lender y'all have the right to inquire what the money is needed for. Once you are sure the need is 18-carat, consider the borrower's ability to repay. If they are working, observe out how much they earn and what other financial commitments they have. If they are struggling to pay bills or lenders, the chances of you getting your money back are depression.

Koyel Ghosh, 30
Concluded up paying an EMI of Rs 25,000 for a friend who did not have a job. She never got the money dorsum.
"Information technology'due south important to cheque the financial status of the borrower before you lend."

A common problem faced by most lenders is the inability to enquire for their money dorsum. Pune-based engineer Shaunak Potdar lent a friend Rs 50,000 as downwards-payment for a car. He never saw the money again. When the transaction is among friends and family, the borrower rarely feels a sense of urgency to repay the loan. Equally in that location is no deadline, repayment becomes last priority. There is no tardily payment fee, no strong interest rates or penalties. The borrower has no motivation to take the repayment seriously. "When I lend today, I politely talk over the repayment schedule so that the borrower understands that I need the money in future," says Potdar.

When you are approached for money, don't part with information technology immediately. Buy fourth dimension to verify the demand. During that time, the borrower could arroyo others for help and get it, bringing down the quantum of loan he needs from y'all. Even then, practice not give the entire corporeality sought. Rohit Shah, CEO of financial advisory house Getting Yous Rich, says "Requite 30% to forty% of the requested corporeality. That way, in case the borrower fails to repay, you lot will non be left with a massive bad debt."

Sometimes a lender unwittingly plays into the easily of compulsive borrowers. For instance, pleas for loans from distant relatives and acquaintances. Ankur Kapur, Founder, Ankur Kapur Advisory, explains, "The reason why the borrower is knocking on your door could exist your lavish lifestyle and habit of discussing your financial status in social gatherings." Discussion spreads speedily and unscrupulous elements attempt to cash in.

Rohan Dhulla, 35
Loaned Rs 2.5 lakh to a friend to start a new business organization.
"At present I study the feasibility of a business programme before lending money for new ventures."

When afar relatives or colleagues seek financial help, attempt to resolve the issue for them rather than helping them to accept an easy style out with a loan from you. "Suggest them to take loans against fixed deposits or gold at low interest rates from NBFCs. Also explain the importance of contingency funds," says Kapur. You tin can play mentor to a colleague who needs coin. "Inquire your colleague to approach HR for advance salary if the corporeality required is big," says Shah.

Adds Tiwari, "If there is no financial awareness among colleagues, arrange a workshop on fiscal planning for them." In this age of startups, seeking money from relatives to start a venture is common. This not but helps the borrower avoid high interest bank loans, simply likewise serves every bit a condom internet against harsh penalties, should the business fail, making repayment difficult.

In 2022, a friend of Mumbai-based entrepreneur Rohan Dhulla approached him for Rs two.five lakh to set upward a business. Dhulla agreed to lend. An agreement was drawn up, whereby Dhulla got 15% stake in the company, and the loan had to be returned within 2 years with 10% interest. In the outset 5 months, Dhulla got dorsum Rs 55,000 before the venture sank. Now he is contemplating ownership out his friend'southward share and getting the business back on runway.

When you are asked to help out for a social cause, be doubly wary. Bombay-based HR consultant Naina Salian was approached by a friend to help an NGO feed the poor. Salian arranged for Rs lx,000 in greenbacks. The so-called friend pocketed the coin and the NGO got nothing. Salian now makes online transfers directly to such organisations. "Bank check whether the NGO is registered before donating. Collect the receipt to claim tax deduction nether Section 80G," says Shah.

If a friend or relative asks you to be guarantor when they seek bank loans, don't concord unless y'all are certain near the borrower's power to repay. If the borrower defaults, the bank volition recover the amount from y'all.

If you must lend
1. Describe up a written agreement. Give the document legal sanction past getting information technology notarised.

2. Work out a repayment schedule. Mention a time frame within which you want the money back and how much needs to exist returned monthly.

3. Remind the borrower politely if repayment schedule is not followed. If the problem is chronic, help borrower resolve money issues by guiding him.

4. Don't hesitate to charge interest. It would plain be less than what is charged past banks and credit card companies.

five. If the human relationship is really important, treat the loan equally a gift. Lend simply an amount you lot can write off.

Source: https://m.economictimes.com/wealth/borrow/points-to-keep-in-mind-when-lending-to-friends-and-family/articleshow/52585667.cms

Posted by: floydandised.blogspot.com

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