Did you know that more than half of individuals have experienced the breakup of a relationship over unpaid debts?
Even though you may believe that supporting your poor buddy or colleague is the correct thing to do, doing so might completely sour your relationship. Here are reasons why giving money to friends or co-workers is a terrible idea if you still need persuading.
They approached you because they had trouble obtaining bank financing.
This may be an option. When financial institutions decline to lend to them, people turn to acquaintances, coworkers, and family for loans. There may be an issue with their credit score. Financial organizations will be hesitant to lend to you if you have a lot of bad debts against your name. If you provide money to a buddy who doesn’t have a good standing with banks and other financial organizations, you can wind up with bad debts.
The justification might not be true.
The justification for borrowing may not be real. Many people tend to use borrowed funds to participate in hazardous ventures (stock market and all). It is a poor idea to use borrowed funds to make stock market investments in the hopes of generating a profit. Your money might potentially be lost in this way. Therefore, you should use extreme caution while disbursing loans to individuals (no matter how close they are to you).
Your money might not be refunded.
This might happen. There is a possibility that they will flee with the money. Being tricked is a sad-sad thing to happen to. You could be astonished and confused when someone you trusted with your hard-earned money flees. Although hardly everyone is that such, it is impossible to completely rule out the potential of such errors and scams.
It might be difficult to request money from someone.
Smartphones turned off, no one home, etc., etc. These are all quite probable outcomes. If you are a regular lender, you may have run into these issues. Making phone calls to people and requesting that they pay back the money may be rather unpleasant. Your calls can go unanswered for days. On WhatsApp, you could come across messages marked with a blue check but with no responses at all. These all contribute to the complexity of lending money to someone. You want your money back but don’t want to bother your buddy or coworker about it. You cannot allow yourself to suffer losses as a result of your pals.
Last words
Although trust is a desirable thing, it can be difficult to blindly believe in someone. Make a few background checks if you genuinely want to lend someone money. If you want to cross-check your borrower loan history, talk to other lenders. By doing this, you’ll be able to avoid scams. Don’t give money to someone who seems sketchy.
Last modified: April 13, 2023
