Get Everything in Writing
If you’ve decided to go ahead with the loan, get everything in writing: the date of the loan, the amount, repayment terms, interest rate, and payment due dates. We know, it’s potentially very awkward and the person who needs the money (or another relative) might kick up a fuss.
But you’re entitled to this while they are not entitled to your money. Even if you said yes previously and they refuse to take this step, you can always say ‘no’ and walk away.
Want some tips in case things get tense? Ask them why they aren’t willing to sign. If they hit you back with a ‘family is supposed to help each other’ then you can reply with ‘I am helping you, I’m just making sure we’re both on the same page’. After all, there would be nothing in the document that would be considered harmful to them.
Remind them that while you are not a bank, you’re still talking about a potentially considerable amount of money and that if you don’t have this safety net then you can’t expect them to do the right thing and pay you back. Don’t be so scared about being honest.
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