Need a Loan to Help Family?
If you feel compelled to help a family member in need, you may have to access funds quickly.
Bank loans take time because of detailed application processes – and they can be difficult to secure, especially if you’re not currently employed or there’s any issue with your credit rating. It also typically takes time to sell assets to raise funds.
One alternative is to use a vehicle in your name to secure an asset-based loan from Pawn My Car.
Family loans to cover births, deaths or medical expenses
Nobody can predict or adequately prepare for all life events, from new additions to the family to medical emergencies or the passing of loved ones. All these kinds of events require immediate funding – and as a parent, grandparent or sibling, you’ll want to help wherever you can.
Family loans have obvious advantages for your loved ones. Their credit ratings won’t be affected and they can pay you back as their circumstances allow, without fear of ruthless debt collectors or other consequences.
That said, it’s important for both parties to be very clear about the terms of a family loan, and to stick to those terms. This is key for maintaining healthy family relationships.
With Pawn My Car, you can use any vehicle that’s fully paid up and registered in your name to qualify for a loan, which you can use to help family or for any other purpose.
Loans to help family with education, travel and business
We all want the best for our kids, grandchildren and other family members. Unfortunately, a good education isn’t cheap for South Africans. Travel is expensive too, and so is starting and maintaining a business.
Parents may feel directly responsible for making sure their children have as many opportunities as possible. For other family members, this isn’t a responsibility, but it can be a privilege. If you’re able to help, especially in something as important as paying school or university fees, that’s wonderful.
Always use common sense about taking loans, and avoid unnecessary debt. However, sometimes a loan for helping family really is the best option – especially if funds are needed to address an immediate, short-term need.
Tips for lending to family or friends
Lending money to family and friends can destroy relationships, so it’s vital to iron everything out at the start. The best approach is to treat a family loan as a formal business agreement, with the same attention to loan terms, conditions, penalties and a payment plan as for a loan you take from a financial institution.
Thrash out the details
It’s a good idea to set up a meeting so that you can outline exactly how much you are prepared to lend the needy party, whether you expect full repayment, whether you expect interest, when you expect to be repaid and so on.
Enquire about your family member’s current financial standing and, if necessary, help them set up a monthly budget that includes the amount they have to pay you. Also, ensure that you chat about what will happen if your family member falls behind with the payments or is not able to repay part or all of the loan amount.
Draw up a loan agreement
Once you’ve thrashed out the details of the loan, we strongly recommend drawing up a formal loan agreement. This helps eliminate the potential for future disagreements about the terms of the loan.
Include the loan amount, the interest rate and the repayment terms and outline what will happen if the borrower defaults or is incapable of paying back the money. Ensure that the document is dated and signed, and keep the original in a safe place.
Resolve disputes amicably
If, for whatever reason, a dispute arises, make every effort to resolve the issue amicably. The last thing you’ll want is to pursue legal action against a close friend or family member.
Get an asset-based loan from Pawn My Car
With Pawn My Car, you can use a car that’s in your name to secure a loan to help family quickly and easily, with no delays.
For more information, contact us on 086 172 9648 or simply complete and submit our online application form.
