No-one wants to be in a situation where they are unable to cover their bills, yet many people are subjected to financial stress due to rising living costs and low savings. One emergency expense could be all that is needed to derail your financial schedule for months ahead. Although, there are plenty of credit products available on the market, sometimes borrowing from friends and family may be the most responsible way to escape a bad financial situation.
When borrowing money from a lending institution you would normally be required to go through a thorough application process and a credit record check, and in some cases even provide collateral to secure your debt. Asking your loved ones for funds may result in an awkward predicament where you may have to disclose private details regarding your financial status and personal life.
In addition, having the pressure of contractually agreed scheduled repayments with added interest on your loan may make you more likely to repay your debt in a suitable timeframe; whereas friends and family may show more understanding, not charge you interest or fees and allow you more time and flexibility to pay them back. This lack of a repayment plan may eventually cause an unnecessary strain on your relationship as both parties are in limbo – the borrower may worry about the lender’s repayment expectations and the lender may worry about approaching the subject of the repayment timeline and their own financial situation as a result of the open-ended loan.
When borrowing from friends and family you may benefit from more flexible repayment options and no interest rate on the loan, however dealing with financial issues is often a difficult and private subject. A credit line may be a suitable alternative, as they offer a lower interest rate than payday loans and flexible repayment options while maintaining privacy about your financial situation.
There are many different types of credit products available on the market and some will be more suitable than others for your circumstances. If you’re unsure about borrowing from friends and family, you could also consider these other forms of borrowing:
We created the Polar Credit Line to provide you with access to credit in a fast, easy and transparent way. Polar Credit is a revolving credit facility that can help with your monthly expenditure while keeping your financial information private.