When you need to arrange funds quickly, it is easy to look to your family or friends to borrow a sum of money. While your loved ones might be supportive and willing to help you out, you must accept that sometimes, unexpected situations arise. Here, by mixing financial and personal matters, you can risk your relationships.
When you need financial help, taking a personal loanfrom a financial institution is a better option and here’s why.
Clarity of loan details
When you borrow money from friends or relatives, you do not record the transaction details or sign any documents. You also do not spell out details like interest rates, loan tenures, or repayment options. Verbally agreeing to loan terms may lead to confusion and disputes during the loan repayment.
Therefore, it is prudent to approach a lender. All terms and conditions are clear when you apply for the loan, and you can always contact the lender’s customer service to clear any doubts.
Easy repayment with EMIs
When you borrow funds from a loved one, you do not chalk out a repayment plan. You only decide on a date by when you will return the amount as a lump sum. If you fail to repay by that date, you risk your relationship with that person.
But if you avail of a loan, you can pay in EMIs. Use a personal loan EMI calculator and decide your future EMIs to conveniently repay the loan within your monthly budget.
Additional Read: Rules to Follow When Taking a Personal Loan
No conflict of interest
While borrowing from a family member or friend, it is an unspoken agreement that they will charge no interest on the amount borrowed. If you borrow money and do not return it for many years, your friend might lose the interest income they might have earned by investing the money elsewhere.
Therefore, it is wise to take a loan from a lender. Nowadays, you can easily compare multiple loan offers online to get the most competitive personal loan interest rates.
Avoid fallouts in your relationships
Consider the following scenarios:
#1 Your friend who lent you the money is faced with an unexpected financial crisis, leaving you feeling guilty.
#2 You fail to pay your loved ones back on time, resulting in distrust and awkwardness every time you interact.
#3 You grudgingly admit your financial difficulties to your friends and family when you would rather have them not know.
#4 You might end up making your relationship bitter due to an argument or a dispute.
#5 Your inability to repay borrowed money might affect your reputation in your social circles.
One of the benefits of a personal loan over borrowing money from your friends is freedom from unpleasant situations like these.
Additional Read: How to Apply for a Personal Loan in 5 Simple Steps?
Taking a loan from a credible lending institution can save you from jeopardising your relationships with your near and dear ones. If you are in need of quick funds, Tata Capital is here for you. We offer collateral-free personal financing at competitive interest rates and flexible repayment options.
Visit our website to check your personal loan eligibility and apply today!