My past experience with giving out loans made me believe that some people who request loans do not really have a plan to pay them back. So why then term it "a loan"? Instead of hiding under the umbrella of a loan, why not be sincere enough to request financial assistance, whereby people can gift you money according to their capabilities if they have it without expecting anything in return? I understand that there could be downtime for anyone and thus a loan request. It's also good that we extend a helping hand to each other in terms of loans when we can to relieve a friend or family member of whatever financial crisis he or she is going through, but it becomes so nice if we pay back with the same energy we used while requesting loans.
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Everyone has plans for what he or she wants to use money for, so I think it's wrong when people assume that, after all, she has a lot of money that she is not using, or perhaps her husband is into money, so she should be able to loan me money whereas paying it back isn't in the picture. This scenario I painted here is common among humans. Personally, I have collected loans from people in the past; in fact, I have a loan running currently that I pay back on a monthly basis. If I request a loan from someone, I should plan on paying it back and have a concrete agreement with the lender. I wouldn't feel at peace breaking an agreement without carrying the lender along. This is how it is supposed to be to avoid blocking the road for yourself and others in the future, should you need such assistance again.
My story, my regret
Two years ago, my husband and I thought that it would be nice if I started a smaller business of my own since I had resigned from my job due to family reasons. We were still deliberately focusing on the type of business that will still give me the opportunity to take care of the kids at the same time, but then we concluded on saving for the money first, and when we accumulate a certain amount, we will then decide on which business I should start.
So every month, he deposits some money in my account, and on the fifth month with the savings, which was during the Christmas season, one of my sister-in-laws called! According to her, her business is children's clothing, and it moves so fast in the Christmas season that she needed more capital for a better profit. She promised to pay it back immediately after the Christmas sales! I trusted her because we were so close, and I wanted the best for her. Since the money I was saving was just there in my account, I thought of giving it all to her; after all, afterall it's just for a short while, and I will have my money back. We didn't agree on a date to pay back, nor did we agree on an installment payment!
Christmas sales were over, January came and passed, I asked for my money, and she kept talking off point. I was sacred! My heart was beating fast. This is #500, 000 we are talking about here. What do I tell my husband? What about my business plans? I hope she will still pay me back. Her attitude was driving me crazy.
Then, after two months, she managed to explain how she lost a lot of money mysteriously in the course of the business and how she is even owing her customers who sent clothes to her, and that I should bear with her until she can pay back. Hmmmm, I don't know if I should believe her with the story, but somehow I heard that she made a statement, which was "Why should I ask her for the money back when I live in the city with my husband, who provides everything for me and my kids"? I confronted her, and to my greatest chagrin, she didn't deny it! Can you see how people think?
Well, the summary of the whole thing is that she was able to pay half of the money when my husband stepped into the case, and to date, she has never paid back the remaining balance.
Lesson learnt
While loaning a family member, I will rather give out only the amount I can afford to give out freely and wouldn't let the person know that within me, it's not a loan, so that if I see the money back, fine; if not, I keep going. Secondly, every financial transaction shouldn't be agreed upon orally alone; there should be a need for proper documentation as a reference in case of unforseen disappointment.
This is my response to the #hivelearners contest on the topic titled Risky Loans