Giving money to someone as a loan is a risky job because you cannot trust everyone. It might happen that you give money to someone and he doesn’t give it back in time and never give it back! Even if you have written the date of payback in the papers but people don’t give loan back in person to person loan and it destroys the relationship. If you seeking out for profits in giving the loans then peer to peer lending loan sites have offered an ability to extend the personal type of loans to the strangers which are based on the risks and the rewards in it.
Person to Person Loan given to friends and family
It is really good to help someone with a loan if he/she is in search of serious financial help. But, when the time of payback will come, you and the borrower both will be hesitated in giving and asking for the money from each other. So there are steps that will be helpful for you in these type of situations.
Guidelines to follow in person to person loan
Always evaluate your borrower:
Always ask for the credit score of the borrower even if he is your friend or family because only credit score will tell you if he is eligible of person to person a loan or not. You cannot get the credit score by yourself, but you can ask you a family member to show it to you for your satisfaction. If a friend is asking for a loan to start a business then you can ask him to show his business plan to you.
Get it written:
In person to person loan always write the whole notes about the loan and the tenure period in which loan will be paid back and the schedule of repayment of the loan which is kind of compulsory because if you will make all the details notarized which will show a seriousness towards loans obligations.
Always charge an interest:
Try to charge an interest rate on the repayment every month, this will also benefit you and the person will be concerned about the seriousness of the loan obligations.