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Money

Is Borrowing from Friends a Good Idea?

There are many people that borrow money from friends. It can seem like a good idea to ask them to lend you some money until you next get some, so that you can afford what you need. It can be very quick and easy and you will not normally have to pay interest on the loan either and therefore it is cheaper too. In some cases it could help you to build up a better friendship with them but it unlikely to be a good idea in the long run.

It can be that the friend decides that they need the money back really quickly. They may have a bill that they need to pay or just want to buy something and they do not have enough money because of what you borrowed. You then may be asked for the money back, but you may not have it available. What happens then will test your friendship. You may feel guilty, try to borrow elsewhere and give them the money back. You may refuse and explain you do not have the money then they get cross with you and your friendship breaks down. Even when you do pay it back, they may still not be happy with you.

There may be a misunderstanding about when the money will be paid back and whether interest is due or not. Unless you have everything written down, you may not be able to agree on things like this. This may not only result in you arguing about what you agreed to do, but also in that disagreement between you never recovering and your friendship suffering as a result. Even if things are written down one of you may decide that you want to change the terms and you may argue about that.

It may also have an effect on your relationship with other friends. Imagine if you agree to lend one money and then another asks but you do not have enough left to lend them any. What if you do have enough but you do not trust them to pay it back, but they know you lent to someone else and have money. You could put yourself into a difficult situation and it could mean that you ruin your relationship with this friend.

So things can get complicated as it is possible to argue over what you agreed with the person you lent money to. Even if you have the terms written down, it could still cause problems if either person does not stick to the terms or maybe does not agree with them. It may be that one or the other of you changes their mind perhaps they can’t repay on time or they want the money back more quickly. This doesn’t happen with a bank or other standard lender. Although they can be more expensive or more complicated to apply to, it can be worth considering whether it is better to pay this extra money and to preserve your friendships.

It can be really difficult if you find it difficult to borrow money elsewhere. You may already have loans or have a poor credit record or need the money very quickly. It can then be tempted to ask anyone that you can for money. However, it is worth thinking about whether it is worth risking your relationship with that person just so that you can have some money quickly. There may be other options which you could use, so do some research first and check out your options.

If you are in the position where you are asked to lend money then it can be difficult to refuse, especially if you think that it will help your relationship if you do lend money. However, it is worth understanding what the consequences might be in the future if you do lend the money. There are ways to turn down people who ask by being polite and friendly explaining either the reason why that you are worried it will affect your friendship or by just saying that you have the money earmarked for other things etc. It all depends on the person and your relationship with them as to what approach might work best for you.

Careers

How a Loan Can Improve Your Career

Many people are afraid of borrowing money and think that it will only lead to them getting into trouble. However, there is a case to say that some loans could really help you move forward in life and that it could be worth borrowing money in order to do this. Obviously you need common sense and the type of loan and what you borrow for has an important impact.

The most common loan used to improve a career is a student loan. Whether you are already working in the field or you are studying something where you have not yet got work experience, you should see an improvement in your career prospects as a result. It is best if you complete and pass the course, but even doing it without completing or passing could help your career although there is no guarantee unless you actually get awarded with the qualification.

A career development loan can do a similar thing. This is something which students take out if they have already used their four year student loan allowance, had a grant in the past or are not studying for a degree. There are many courses that can get funding through a loan like this and in order to qualify you have to prove that you are doing a course that will develop your career.

These two loans work very differently though. The student loan has an interest rate which is set by the government and the repayments are taken out through your tax code and so you only make repayments if you are earning over a certain threshold and you only have to make repayments for thirty years and after that the loan is written off. A career development loan is more like a standard loan and you will have to make repayments as soon as the course ends regardless of what you are earning. The interest rates are set by the lender and can be quite high.

There are other loans which can also help you to develop your career but in a less direct way. For example, if you need a car for a certain job that you want to do, then you may need to borrow money to pay for it. Although the loan is not directly related to the job, if you have no other way of affording the car and it is essential for the job, then it is helping with your career. The same might go for getting driving lessons and borrowing money to pay for them if you want to do a job which requires one. It may be that you need money to buy some smart outfits for work or an interview or to buy a uniform. You may need to borrow some money for a deposit on a home if you move closer to the location of your job.

As you can see there are many ways that borrowing money could help you in your career. Some loans affect it directly by paying for training and others more indirectly. This just shows that if you are scared of borrowing money you could be holding yourself back. Some people avoid all borrowing as they think that it is risky and expensive. Obviously all borrowing is risky and has to be paid back and so you need to be sure that you will be able to manage that. It is also wise to think about whether you will be able to manage those repayments even with the job that you will be doing. If you are confident then it is worth going for it. This is because advancing your career is likely to lead to a pay rise. This will mean that not only will you be more than capable of being able to repay the money that you borrowed, but you will also be able to earn more in the long run and more than make up for the costs of the loan. If you do not go for the loan then it could mean that you will end up staying in a lower paid job, which will limit your earning potential. You may even find that you are not so happy in your work because you cannot progress.