How to Refuse Credit to Family and Friends
One of the most uncomfortable things I have ever had to do was ask a family member for money. I was about to graduate, broke but was debt free and I urgently needed a car. So I asked a family member to give me a loan.
Yes it was strange and to my surprise she refused. Although I know it was awkward for her too, she refused the loan in a way that made me feel like it wasn’t anything. She knew why you should never lend money to friends or family. Instead of simply rejecting my request and just allowing me to find an alternative solution, she helped me find a way to pay for a car.
Are you in the position to refuse a loan from a friend or family member? your friend or family member. Here are some tips on how to gently decline while still helping your friend or family member.
How to refuse a loan request from friends or family
Don’t feel under pressure
Many people agree with this type of loan application because they don’t feel they can say no. You may feel as if you have stepped into a corner with no way out if your friend or family member forces you to make a quick decision. You don’t have to say yes, so don’t be put under pressure. Making the decision to refuse to lend money to friends or family before this becomes a problem will help relieve pressure.
Respond to the request within 24 hours
If it is absolutely necessary, tell your friend or family member that you need more time to think carefully and that you give him your definitive answer within 24 hours. This can make the decision easier because you have time to reassure yourself that you are doing the right thing. The extra day gives you the time to gain the confidence that you need to form an eloquent response. Out of respect for the problem of your loved one, and to ensure that you do not build up false hope, try to respond immediately if it is possible.
Be determined and concise
When you talk to your friend or family member, explain strongly that you cannot grant him a loan. For example: “I would like to help, but I am not in a position to lend you the money now.” This is short and to the point and does not give your friend or family member much room for a fight. If your friend or family member has your best interests in mind, this should be the end of the discussion.
Do not make promises that you cannot keep
Once you have decided that you will not lend money to friends or family, do not ignore it. Make it clear that you cannot lend money; try not to let them go softly by saying that you might give them money next year or somewhere in the future. If you hint that a loan is ‘ever’ possible, then you determine that person’s own owner to repeat the same uncomfortable conversation with you in the future.
Do not make exceptions
If you don’t really want to lend money to friends and family, you can’t make exceptions. Borrowing money from a family member, but refusing to lend money to another family member, can potentially cause conflicts within the family. Stay steadfast and don’t come back from the decision not to lend money to friends or family, not even this “one” time.
Things are a bit trickier if your friend or family member knows that you have extra money. In this scenario you could say that while you have the money now, you may need the money in the not too distant future. Emphasize that this money is your emergency fund to protect you against unexpected expenses. If you are concerned about selfish behavior, you can also explain that you do not want this loan to make your friend or family member guilty if they cannot repay the loan.
Alternatives to borrowing money
Once you have determined that you cannot provide the loan, do not leave your friend or family member in a hopeless situation. Instead, open his eyes to some other alternatives:
Help Review of their finances
To mitigate the blow, you offer to let your friend or family member look at his finances. In this way it is clear that you want to help. There may be a way for your friend or family member to prevent you from getting a loan. Calculate income and expenses, and see what can be cut from the budget. Determine whether a more manageable repayment plan is an option for current debts. Also suggest making a budget to keep friends and relatives within their reach, so that they don’t have to borrow money in the first place.
Suggest alternative ways to earn income
Maybe your friend or family member has to earn more money to pay for unexpected expenses. If that’s the case, suggest other ways to earn extra income by coming up with ancillary ideas. If someone is artistic, recommend that they sell crafts or jewelry on Etsy. Or recommend fun or unusual side jobs, such as a casino dealer or caterer.
Suggest selling PersaCalm rich items
Selling a number of personal items to get extra money is another way to earn income. When you refuse the loan, you offer to help your friend or family member through their old stuff and get a garage sale. If you are a computer, you may also be able to help your friend or family member sell items on aBay.
Suggest alternative loans
Don’t offer someone an alternative loan unless there is no other way to resolve the debt. If this seems to be the only option, there are some great peer-to-peer uLend companies like Presper and uLend Club. Depending on the credit history of your friend or family member, it is possible to obtain an unsecured loan at a good interest rate from one of these websites. The guidelines that they use are much less strict than the guidelines of a local bank.
Give a gift
Does your friend or family member approach a birthday? Consider giving a money gift this year. The gift is appreciated and you may feel a little better about refusing the loan.
Co-sign for a loan
If you think your friend or family member represents a good risk, consider signing a loan. By doing this, you make the agreement between the two parties much more legitimate, and they have a real incentive to repay the loan. However, keep in mind that as a co-signatory you are responsible if the other person cannot meet the loan obligations. So only consider this option if you are sure that the other person will be able to repay the loan.
Do not feel guilty
You will probably feel guilty about Malcolmijk for not uLend money to a friend or family member, but you must have passed this feeling to successfully reject the loan request. It is not your fault that your friend or family member is in a financial mess and there is no law that says you have to give up your hard-earned money to help someone else.
If you can’t afford to help or don’t want to help, don’t feel guilty. If you have provided valid reasons for refusing to lend money to anyone, it is up to your friend or family member to accept this and continue.