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If you are considering lending money to friends or family members, this article discusses what you should consider, and how you can increase the likelihood of having your loan repaid. Should you mix friends or family and finances? Private loans between family members and friends are a convenient, flexible and cheap alternative to using commercial loan organisations such as banks or pay-day lenders. Many people in need of a loan will first approach relatives or friends who appear to have money to spare, especially if the borrower does not have a good credit history, or is just starting out financially. The lender may have good reasons for making the loan which are not financial, for example parents may lend their children money for university or to help them buy their first home. Consequences of loaning Whatever the motivations are for such private loans it is important to be aware of the potential ramifications of introducing financial matters into a personal relationship. For example,

  Paying for college can be a juggling act. It can be difficult to   balance the amount that you borrow   with how much you work and how quickly you can graduate from college. If you are determined to graduate debt-free, it may take you a bit longer to graduate, since you may be working full time and taking only a few classes a semester. And if you decide to attend school full-time, you may accumulate more in student loans, since you won't be working full-time. Consider the following as you decide whether it's better to graduate college more quickly or graduate with less debt. Working While You Attend College  One of your options to graduate college with less debt is to work full-time and to attend school part-time. This schedule may be a good option if you are already supporting a family, though you should consider how much your earning power will increase once you get your degree. If you are working, your employer also may offer to reimburse the cost of tuition for a certain

  A legal lending is the maximum amount of money a bank can lend to a single borrower. Every financial institution in the U.S. has a legal lending limit that is overseen by the Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency (OCC).  The current code on legal lending limits states that a financial institution cannot lend more than 15% of its capital and surplus. 1  However, this can vary somewhat, depending on whether the bank operates at a state or federal level and whether a borrower uses collateral to secure the loan.  Definition and Examples of the Legal Lending Limit  The lending limit is the highest amount of money a bank or financial institution can lend to an individual borrower. In the U.S., the legal lending limit is outlined in  Part 32.3  of the U.S. Code (USC). The FDIC and OCC are responsible for managing the legal lending limit and guiding banks on how to enforce it. The legal lending limit cannot exceed 15% of a bank’s capital and

  The Balance / Laura Porter A loan can help you pay for the things need when you don't have the cash, but borrowing money can be complicated. Starting the bank loan application process without understanding the ins and outs can cause your loan request to be rejected. Learn what to expect and what you can do ahead of time to increase the odds of getting approved. Understand Your Credit  You generally need credit history to get a bank loan. In addition, your credit will often dictate the type of loan and loan terms a lender grants you. This means that you should have a history of borrowing and repaying loans to get a loan. How do you get a loan when you need money if you don’t have credit? You have to start somewhere, and that generally means borrowing less money at higher interest rates. You can also consider alternative lenders such as online lenders, who are often willing to look at aspects of your financial record beyond your credit when deciding whether to grant you a loan. Onc

  While financial prudence demands that one should have as little debt as possible, preferably none at all. But there are times when it may be a better idea to fund the purchase or expense through debt rather than liquidating an existing asset. Loans can help you to realise your aspirations in a timely and planned manner, provided you repay the loan on time. Navin Chandani, chief business development officer, Bankbazaar says, “Not all debt is bad. Aspirational products like a car or home of one’s own can take years or even a lifetime to save up. By the time you save up, you may realise that your savings aren’t enough. Other things, like education or health-related expenses, are very time-bound. You may not be able to pursue a higher degree five years down the line, or it may be too late to pursue by the time you build up your corpus. In all such situations, a loan can help.’’ Manav Jeet, MD and CEO, Rubique, points out that someone who has never taken any loans, will not have any credi

  If you are applying for a business loan, then you must already be a few years into running your own company. These loans are meant to boost your revenue potential by helping you acquire necessary items. Your lender spends a lot of time analyzing your business and personal financial situation when you seek out a business loan. Some people are willing to put their personal assets on the line, while others prefer to keep business endeavors separate. Even if the lender makes some changes, it is a good idea to go in with an idea of what you desire to borrow. There are a few things your lender may look at when determining the final amount. Credit and Collateral Credit checks are a regular part of most loan applications. This is not something you can get out of. It is best to confront your credit before you apply so you know what you are dealing with.  If you find a lower score than you prefer and have some time to work with, focus on some credit repair before you apply for a business loan.