If money is urgently needed, official loans are usually taken at banks or other lending institutions, but there are other ways to borrow. One of the most popular is to borrow money from loved ones, most often parents. It is in most cases a better option for taking official credit because it does not involve such a high risk, but it also has its own drawbacks and, before taking such a step, you should think carefully about whether you really need to borrow from your parents?
Need to borrow from your parents?
As already mentioned, borrowing from parents on one side is less risky and also less profitable.
First of all, parents are unlikely to demand interest on the loan and interest on the loan. If only the borrowed amount is to be returned or only a small amount is to be repaid, it is a huge advantage.
Secondly, such loans are usually not subject to formal terms. If you are somewhat delayed with repayment, parents will most likely understand it and will not impose any penalty.
Thirdly, if the loan is not official, in the event of non-payment the debtor cannot be the subject of legal proceedings, nor can debtors be involved and the credit history is not damaged . In short, with unofficial loans, the borrower is not accountable to the law and even when the loan is formally drawn, the parents are usually more receptive than official credit institutions, but of course, such money loans also have their drawbacks. The fact that the money is taken from the parent does not in any way mean that there is no need to answer the loan.
Money must be returned in the same way. Even if the loan is not official and no penalty can be imposed on the debtor in such a situation, the borrower risks damaging personal relationships. It is money and loans that are one of the main reasons why very close people collide. Loss of contact and good relationship with parents can be a much greater loss than paying for a loan extension or penalty interest.
Damaged relationships with parents are too big a victim, so sometimes it is better to take official loans from banks to avoid such a situation. Borrowing money from parents also requires an assessment of their financial situation and the ability to lend the required amount at a given moment. Many parents are ready to sacrifice everything on their boards and lend money even if they don’t have it. It may happen that by bailing out itself, the borrower has problems for his parents. To avoid this, it is imperative to make sure that the parents themselves have enough money. Another reason why other types of loans are often preferred is the unwillingness to disclose who the money is for.
Asking the parents for the money will definitely be followed by the question – who needs it? If the reason is quite ordinary and known to everyone, there will be no problem telling it, but sometimes money is needed for things that loudly do not want to talk to even their parents. In such a case, a quick credit would certainly be a better option, since it is not necessary to specify the purpose for which the money will be provided.
Overall, it can be concluded that this type of loan has both pros and cons and that each situation needs to be assessed from different sides. Borrowing from parents, maybe there was not much to worry about being able to get into debt and before the court, but about reciprocal relationships. However, before borrowing money, it is always necessary to evaluate the need for the loan and to give up your money in time. You should never borrow money unless it is an emergency or a future investment that will pay off.