Tuesday , 27 June 2017
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Family loans – Beneficial or not?

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A loan program would help the person in managing their personal or business financial requirement. Individuals or business organizations would be in need of money for some purpose or the other and to obtain the money one would need is not an easy task. Credit status would be a crucial factor that would decide whether the borrower would be able to secure the loan or not. Financial status of the borrower would determine the eligibility of them in obtaining the loan and the amount of loan which they would be eligible for.

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People with a good credit and financial status would be able to obtain the loan they need without much problem. A bad credit borrower is the one who would struggle the most. Lenders would rate a borrower based on their financial status. The level of risk possessed by an individual would be determined based on their credit status. Bad credit holders pose the highest risk and so conventional lenders would not be ready to grant personal loans for bad credit to them. Thus, bad credit holders would look for other lenders such as private lenders, online lenders, agencies, loan sharks etc.

All these choices offer the loan under risky terms and conditions. Family loan is regarded to be the best funding program that a bad credit holder would be able to obtain. Two major advantages of a family loan for these borrowers is that, the loan program can be obtained quite easily and the terms associated with the loan would also be very lenient, and so the risk involved in such a loan would be very less. In case of a family loan program, the lender might be a family member or a relative or a friend.

Family members or friends or relatives would be familiar with the borrower and they would know a lot about the person and so the chances of them offering the loan is very high. Family members would not grant the loan based on the credit or financial status of the individuals; rather, they would offer the loan based on how strong the relationship is between them and the borrower. Financial counselors advise both the parties i.e. the lender and the borrower to mutually sign a family short term loans online agreement.

The loan agreement should contain all the terms associated with the loan. The amount of money offered by the lender to the borrower and the terms associated with the loan such as term period, monthly payment, interest rate charges and other charges, if any. Agreement would not only make the loan process legal but would also prevent the occurrence of any misunderstanding between the two, which would lead to the spoiling of relationship. Terms of a family loan program would be very normal even for a bad credit holder, which makes it an attractive option for all.

To sum up the discussion of whether family loan would be beneficial or not, the answer is very clear and straight forward. Yes, a family loan is the most beneficial of all the loan programs offered in the market.

About Kelly Passarelly

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