5 Reasons Why Borrowing Money from Friends is Not a Good Idea

Close friends and family members are always willing to bail us out of difficult situations. It has been a common practice for decades. However, borrowing money from friends and family can often be complex due to the potential misunderstandings that can damage relationships.

Below are the 5 Main Reasons why you Should Avoid Borrowing Money from Friends and Family:

1) Lack of Clarity in the Transaction

When money is borrowed from friends, the details of the transactions are not discussed. Few things remain unanswered. Some of them are the duration of repayment, will there be an interest component, what will happen in an unfortunate event, etc. This vagueness can give rise to minor confusion or disputes in the future.

2) Morale Dampener

When borrowing from friends, one may feel a loss of self-confidence or morale as it makes him feel like he owes his friends something, and may constantly worry about his self-image until he is able to repay the amount.

Must Read:How to Manage Your Expenses using a Personal Loan?

3) Awkwardness

This is a major feature of loans taken from friends and relatives. After borrowing from a friend, one may socialize with the same friend, and may be more likely to feel awkward. Many times, such situations have caused the borrower to feel extra sensitive, and otherwise harmless remarks may be perceived as signs of passive aggression.

4) Risk of Non-Payment when they Need the Money

There may be a situation when the friend who has lent funds may require the money urgently. Being unable to repay them could cause a lot of strain and anxiety.

5) Potential Damage to the Relationship

When you borrow from friends or family, there is certainly a risk of distancing them. There could be uncomfortable or complicated situations in which others get to know. Or it is possible that the friend’s family members do not appreciate it. There could also be discomfort if the friend asks for the money back before you pay him or her.

Consider a Personal Loan!

Based on the scenarios above, it is clearly better to quietly have a straightforward personal loan, in which you pay EMIs to a financer. This will make you retain much valuable peace of mind, and be in charge of your finances without having to depend on others.

SMFG India Credit Personal Loan offers a Package of Suitable Benefits

With SMFG India Credit, you can get a personal loan interest rate starting from 13%. You have the flexibility of repaying your personal loan within a tenure between 12 months to 60 months. The loan amount can go as high as Rs. 2,500,000 depending on your eligibility, which can help you achieve your goals easily.

Must Read: How To Choose The Best Personal Loan For You?

Below are the Best Reasons to Consider a Loan from SMFG India Credit Instead of Going to your Friends and Family:

1. Instant and Quick Approval: SMFG India Credit Personal Loan offers instant in-principal approval for online applications. Within 24 hours of final loan approval (which happens after successful verification checks), the funds are disbursed to your registered bank account if you fulfill the personal loan eligibility.
2. Seamless Documentation: SMFG India Credit’s documentation is extremely simple. It just includes filling and signing an application form and submitting
   1. KYC documents & PAN,
   2. Salary slips for the last three months for salaried individuals or suitable income proof / financial statements for self-employed individuals.
   3. Bank statements for the last six months.
3. Online Application: You can apply for a personal loan online. It is a simple process. Just click on the ‘Apply Now’ button and thereafter fill up the requisite form. You need to then specify the amount and tenure, upload the requested documents, and then submit. Upon speedy verification, the required loan amount would be disbursed to your account within hours.
4. Personal Loan Eligibility Calculator: Personal loan eligibility varies from person to person. The main criterion considered is disposable income. Your credit score is also expected to be healthy. Other factors like your age, nature of employment, repayment capacity, etc are also considered. SMFG India Credit’s personal loan eligibility calculator gives you a clearer idea of the maximum loan amount you may be eligible to get.
5. Personal Loan EMI Calculator: SMFG India Credit’s personal loan EMI calculator can give a fair picture of your monthly outflow. You just have to enter your loan amount, repayment tenure, and rate of interest. In a few seconds, you will get an estimated amount of your monthly outflow.