What do you do if a loved one asks to borrow a big sum of money from you? Experts weigh in on when it's OK to fork over the cash — and when you should probably say no.
Michelle Singletary and her husband used to lend money to her friends on a regular basis, until one incident"taught us a lesson," she says.
Avoid getting into a situation where the borrower wants to"write up a contract or have terms" on their loan, says financial educator. They imply a contractual obligation, which may put a strain on relationships. Don't forget to talk about those boundaries with your partner, says De La Rosa."I was born in the Dominican Republic. Lots of people sacrificed to bring us here. My husband grew up in Texas. We had to be very clear when we got married about who was in our circle."You checked your finances and you realize you're not in any position to give anyone money.
So think about other ways to assist your loved one during this difficult time. Offer to bring them dinner. Help them with childcare so they can pick up a few more shifts at work.If a friend or relative asks you to cosign a loan, don't do it, say our experts. Cosigning a loan means you're agreeing to be responsible for someone else's debt. If the main borrower misses payments, you must repay the loan.
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