Borrowing Money

[Leslye]

Borrowing money from friends or family is a mistake. If you can’t pay back the money they have loaned you, you could ruin your relationship with them. If you have no other choice but to ask a friend or relative for a loan, make sure the loan doesn’t put a hardship on them. If the loan is for over $10,000, the lender is required by tax law to charge interest on the loan. All terms of the loan should be put down on paper. If there is collateral backing up the loan, that should be documented. You also have to document if you should die, how the loan will be repaid. Everything needs to be in writing. You need to treat this as a business transaction.