In 2023, the average household in Canada has almost twice as much household debt as gross income.
Although it is clear that many people in Canada consider a certain amount of debt to be acceptable, some people regret having so much debt when they are facing financial struggles. In such cases, knowing how to politely ask for money from family and friends can be crucial.
If you make certain mistakes during this process, you might damage important relationships for years to come. The good news is that following some simple guidelines can preserve your relationships while also helping you get the money you need to handle emergency situations.
Read on to learn all about the most vital things to keep in mind when you are asking for money from friends and family!
Understand the Other Person’s Situation
When you are facing money problems, it can be easy to fixate on your own situation. However, before you ask a friend or family member for money, make sure you understand their own financial issues. In some cases, you might discover that your intended lender is not in a situation where they can loan you money.
However, if you’re unlucky, your friend or family member might feel too awkward to tell you about their financial issues. If they are not willing to offer you a loan for no apparent reason, accept their decision with grace and focus on preserving your relationship.
Be Transparent When Asking for Money
The more transparent you can be, the more understanding people are likely to be when considering lending you money. You might even want to review some of the other things you have tried as well as how you got into a difficult financial situation.
When people understand why you need to borrow money, they may feel much safer about you paying them back in the future. On the other hand, if people have no idea why you need a loan, they might wonder if you are irresponsible with your money.
Some people are too embarrassed to be clear about why they are asking for a loan. However, it is much more important to focus on your financial needs as well as your close relationships than to try to protect your own ego.
Make a Plan for Paying Your Loan Back
The biggest concern many people may have with loaning you money is whether or not they will get it back. Although failing to get their money back can cause financial problems, it can also damage your relationship in a huge way. As a result, many people feel it is safer to never mix finances with their close relationships.
However, you may be able to keep your relationships strong if you are as explicit as possible about how you will pay your loan back. Show that you have put a lot of time into thinking about how you will pay back your loan. That way, people will feel much safer about the whole situation.
Commit in Writing When Taking Out a Loan
As great as a detailed plan can be, it may not mean as much to people if it is not written down on paper. Offering to create a written agreement for your loan can help people understand that you are serious about paying your loan back.
Some people think that creating a written agreement for taking out a loan is overkill. However the more certain you are that you will pay back your loan, the less risk there is in writing it down. You might as well go all in on preserving your relationships when you ask to borrow money.
Consider Offering to Pay Interest
One of the main reasons people prefer to borrow from friends and family members is that they don’t have to pay exorbitant interest fees on the money they borrow. However, even if you pay your friends or family members back exactly what they loan you, you will still have affected their financial situation in the meantime.
Interest is the primary way we acknowledge the value of borrowing money when we need it. Offering to pay interest on your loan is an even more powerful way to show how much you care about your relationships.
You don’t have to spend a lot of money to make this powerful gesture. For example, you might offer to pay back your loans with as much interest as your friend or family member would get if they kept their money in the bank. Considering how low many bank account interest rates are, this might not cost you much extra money at all.
However, even this tiny amount of interest can go a long way towards showing how much you appreciate being able to ask your loved ones for financial help when you need it. Of course, you can also consider paying higher amounts of interest depending on your exact situation.
Consider Different Types of Loans
When you explain your plan to your friend or family member, consider talking about other loan options as well. Otherwise, your friends or family members might wonder why you are asking them for help when you could get it somewhere else.
Showing that you have considered your options also expresses that you are coming to them for help as a last resort.
At the same time, considering your other loan options might help you manage your financial difficulties without asking for a loan from a friend or family member. In Canada, you can find quick cash loans of $500 or more to help you cover emergency expenses.
Know How to Politely Ask for Money From Loved Ones
Learning how to politely ask for money can be an essential tool in your financial toolkit. We hope the tips in this article will help you navigate this difficult situation with as much grace as possible. As long as you honour your commitments, borrowing money from family and friends can help you out of a tight spot without damaging your relationships.
To find out more about how you can find quick cash loans in Canada when you need them, contact us at 24Cash at any time!