Introduction
If you are one of the lucky people out there who has money and are thinking of ways to put that money to good use, then read on! Some people will loan small amounts of money to people that they know and get a return on it when they are paid back the principal amount plus the interest. When you are dealing with the loan and money aspect of things, then it can get very tricky, so it’s a good idea to make sure that you have a plan in place beforehand.
History
When it comes to loan and money problems there are many people that seem to be in trouble. If you find that you are in a situation to loan that means letting people borrow money from you, then you also need to protect yourself in order to make sure that you do not lose your money. Here is an example, if you decide that you are going to loan and/or lend a friend money, then you should make sure that the terms are drawn out very clearly. This will help you avoid tensions later on.
Features
If the terms of a loan and the duration that it is expected to be repaid are not clearly stated, then problems can arise with getting your money back. The best way to keep this from happening is to sit down with the person that you are lending your money to and also fix a timeframe within which the money must be repaid. For instance, decide on the duration within which they have to repay the money back to you. Also mention clearly, the number of installments and the amounts that are to be repiad in every installments. Talking with the person that you are lending the money to will certainly help you decide this. Also make sure that you have the interest rate fixed beforehand, either a certain amount for each month or a set amount if it’s paid back by a certain date will suffice.
Once you get these details hammered out, it’s best to have papers drawn up by a lawyer. These papers should have all the details that you and the other party have decided on formally written in them. Then make sure that you and the other party go to a notary and sign all the papers. Then keep these papers on file until the loan and interest have been paid in full. These papers will keep you safe in the event that the person doesn’t want to pay you back or other issues arise.
Tips and comments
If all of this goes right, then you can actually end up making quite a bit of monay by simply lending your money to other people. It will also set you up in a better position to loan and grant extensions to others in the future, of needed. Although, initially it may seem to difficult to lend money, in reality it is not that hard at all. With pre-determined terms and conditions set between the lender and the borrower, the lender has the potential to earn handsome returns.
