All About Loan In Singapore
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Why You Might Avoid Your Loved Ones And Borrow From A Lender Instead

When the need arises for a loan, whether it be for a car or the down payment on the first house, people are reluctant to ask a relative. The first reason that comes to mind, is the embarrassment factor. Most people feel that they should be responsible for themselves, after all once they hit the teenage years, that is what they have been yearning for. It is far easier to sit in a stranger’s office and discuss their personal finances or lack of. In many cases people are not taught about fiscal responsibility by their parents or the school system. With the world in a hectic pace, it is more of a “learn by making mistakes system.”

Once a person does fight down the embarrassment factor and then start considering asking a parent for a loan, the idea of perhaps missing a scheduled payment, becomes an issue. The thought process is one of having to either set up a payment schedule or play it rather loose. Either case scenario tends to worry the potential borrower. The idea of receiving a phone call from ones parent, inquiring when some money may be coming their way, is enough to strike fear into the bravest of hearts.

Borrowing money from loved ones, whether it is a parent or a grandparent, gives a person a sense of unease. They tend to look over their shoulders wondering when the lender is going to ask questions about how the money was used or if everything is on track. Such questions can lead to hard feelings and the potential borrower knows that if they fall behind with a bank or other lending institution, they will have to deal with collection calls. They may feel that collection calls will be easier to handle in that they won’t have to guard what they say or the tone of voice that they need to use. Potential borrowers may see a day in the future where the relationship with their loved ones has taken a turn for the worse and may even end up dissolving. In comparison, having to do business with a different bank by having them take over a loan, seems much more desirable.

Most people when starting out need to establish a credit rating. In order to do that and have a great rating, money must be borrowed and repaid on time. It is necessary for a borrower to do this on more than one occasion in order to establish an actual rating. Potential borrowers are aware that by getting a loan from their parents, they are not going to be able to either start a credit rating or build on the one they already have. This will make getting larger loans much more difficult in the future.

In the end, a potential borrower of good character tends to go over to lending institutions in order to save face and build up trust and rapport with their bank manager.