Disadvantages of borrowing money from friends and family

When it comes to money, people sometimes become selfish as it is very important for life. Money plays a crucial factor in everyone’s life. This is because it is essential from birth to death and people are working hard only to earn money. They spend on things that are not important and do not save. They run out of it when they need it the most. This is when they seek the help of banks and other financial institutions for money. Banks and financial institutions which lend loans usually depend on credit score. If the person has low credit score, then the loan is automatically rejected. But not everyone has good credit score and hence these people choose money lenders to borrow money from. Money lenders are people or individuals who lend money typically as personal loans at high interest rates. These rates are usually justified due to the risk involved in it. They are different from banks and financial institutions who led money. It mostly lends money to people who have less access to banking activities due to low credit score or gamblers or compulsive shoppers who often get into debt. The money lenders do not need much information of the borrower except for some personal details and ID proof. The advantage of low interest Singapore licensed money lender is that, there is no pressure of repaying the money as soon as possible and sometimes they offer grace period for repaying the money which is unlike banks. Many people borrow money from their friends and family. This can have its advantages and disadvantages. It is always easy to borrow money from friends, but it is difficult when it comes to repaying it back.

Disadvantages

The main disadvantage is that they are open-ended. They do not have any agreements signed or a pay date when it must be paid back. With an open-ended loan, repaying the money is not a priority unless a deadline is issued. It is difficult to ask for money back since the money lender may think that it can destroy the relationship. Borrowing or lending money within friends and families make social gatherings awkward. The person may find it difficult to face the borrower or lender. The borrower becomes a servant to the lender. That is why choosing a low interest Singapore money lender will help.

Licensed money lenders

Choosing a registered and licensed will help a lot in making a safe money transfer. Some money lenders also offer Singapore lowest interest refinance home loan. This way public can be benefited.

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