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What is paying for something with money that you borrow and must pay back usually with interest?
In a debt-based financial arrangement, the borrowing party gets permission to borrow money under the condition that it must be paid back at a later date, usually with interest. Debt can be classified into four main categories: secured, unsecured, revolving, or mortgaged.
When you borrow money you are charged?
This is due to interest and fees, which is what a lender charges you for the use of its money. It is also referred to as a finance charge. A finance charge is the dollar amount that the loan will cost you. Lenders generally charge what is known as simple interest.
Do you know people who have loaned money to others?
While I did get my money back, I know people who have loaned money to others, close friends/relatives in fact, who never got the money thereafter. Some folks even disappeared off the face of the earth after receiving the money. Here is a simple 3-step guide to deal with situations where friends (or people in general) ask to borrow money from you.
What happens when you borrow money from a family member?
When they borrow money from a loved one, they often feel a moral and emotional obligation to that person because the lender helped them out of a tight spot. Sometimes, people unintentionally (or even intentionally) manipulate friends or family members they loan money to when the borrower can’t pay them back.
How to repay money borrowed from others?
For those of you who are borrowing or have borrowed money from others, repay them in a timely manner. In fact, repay them as early as you can, rather than only on the agreed upon date. Know that your friends/relatives took the leap of faith and lent you money where others probably wouldn’t, so you don’t want to let them down.
Should you lend money to friends and family members?
If you lend money to a friend or family member, be conscious of the moral obligation they feel to you, and don’t take advantage of their situation. Although they may owe you money, you don’t have a right to expect them to do whatever you ask. 6. The Borrower May Ask for More If you agree to lend money to a loved one once, you can do it again.