Your friend or loved one is likely to be deep in debt and may not qualify for a conventional bank loan. However, there are peer-to-peer lending risks you need to be aware of before giving out your money to them. Give yourself time to ponder your answer when someone you love asks you to hand over your hard-earned cash. Ask what other ways they have been trying to obtain capital. It pays to inquire and clarify that you need full financial disclosure if you consider lending money.
To minimize the burden of lending to friends or relatives, consider these extra tips:
- Only Lend What You Can Afford
An old gambling game says you can never wager more than you can afford to lose. For loans to a friend or family member, the case is usually different. You need to determine if you are willing to forget the debt to save …