Everyone in this world is either a lender or a borrower or even both at most of the times. Yes, the term lending does not only involve lending money, which is a specific aspect. Lending can be of anything from:
- Your books to pens
- Your clothes to shoes
- Your wrist watches to jewelry
- Your DVDs to appliances.
All are given to someone else to use with an expectation that it will be returned on time as promised and in good condition.
- That means, for that period of time when you friend and neighbor use the object lent out, you will not be able to use it.
- Moreover, there is a risk of it being returned in an ‘accidentally damaged’ condition or may not be even returned ever!
Yes, people do tend to forget to return a thing that belongs to others that does not ask for any penalties.
These small things or objects can be easily replaced but when it comes to lending money, you simply cannot afford anyone forgetting to return it, being unable to return it or even give it out without any additional benefit.
Asking for interest
There are lost of reasons why a money lender whether it is the traditional bank, credit union or online sources will charge a specific amount as interest on the loan.
- In order to avoid all these possibilities that will put your financial health at risk, a sort of a reward in return for the sacrifice is asked by the money lenders in the form of interest.
- This interest is also the ‘penalty’ you pay for not having ‘your’ money to use and instead have to use ‘others’ money.
- Another significant reason to ask for interest for lending money is that, to be very honest, if things lent out are not returned, it will make any lender hesitant in the future to lend out anything, especially money.
The interest will keep the borrowers on the toes and concerned that the actual amount borrowed will grow in volume if it is not repaid within the specific time, thereby becoming a debt burden which often crushes individual to death, well financially.
However, simply putting an interest clause while lending money is not enough to secure your money loaned out.If it was then there would not have been so many delinquent loan accounts. Therefore, you will need to follow a few specific principles that will ensure that your money is safe and secure, no matter to whom you lent it out and how much amount you loan.
Money lending principles to follow
You will be better off if you lend money with caution. Often you will come across people warning you not to lend money to a friend, and all of them have good reasons enough to say so.
Parents will ask you not to lend out money to your friends as they are the more likely ones not to return the money. This will not only result in a financial loss for you but it will also result in losing one of your friends, or maybe the only one you had. Well, they are not Shakespeare to say: “Neither a borrower nor a lender be; for loan doth oft lose both itself and friend.” It is just their instinct and experience speaking, and of course the human nature!
However, speaking about human nature, it is also very human to feel the hardship of a friend and go beyond the way to help him or her out. Humans are programmed like that by God to be willing to offerassistance when a friend needs a financial help or a friend who is on the verge of being homeless and you want him or her to avoid such a dire situation.
Well, no matter how helpful you are, you will always have a slight doubt about your money will be returned by your friend. Still, you lend it out with fear and assumptions. However, with a little bit of caution and being calculative, you will be able to take out the fear and assumption from the lending equation and see the facts.
Follow the Bible
If you do not want to listen to your parents and other well wishers and doubt them to be playing against you to stay away from your ‘needy’ friend, here are a few advices of God! These are the few principles from the Bible about lending money to a friend that will put you in the right financial track and also not lose a friend.
- Lend only to those who need it: Jesus says in Matthew 5:42 that you should only give to one that asks you to and you should never turn away from the ones who want to borrow from you. This will somewhat reduce the amount of risks involved in indiscriminate lending.
- Do not lend your friends expecting some benefits in return: In Luke 6:34-35a, where Jesus tells the crowd of people that, if you lend to those people from whom you expect a repayment on time then where or what is the credit in that to you? Even the sinners will lend to sinners and they expectto be repaid in full. You as a human being should love even your enemies and do good to themand lending to them without expecting anything back in return is probably the best deed that you can probably do.
- Do what God want to do: when you give generously to the people who need it, you are actually doing what God wants you exactly to do.Proverbs 19:17 says that anyone who is kind to the poor actually lends to the Lord.You are created by God to do good deeds because you are God’s handiwork.
Lastly, if all of the above seems to you like a preaching, you should be careful how you lend your money. According to the Proverbs 22:7, even God tells to be cautious while lending. You should be practical and lend to someone who has a proper plan to pay it back.
Isabella Rossellini is a marketing and communication expert. She also serves as content developer with many years of experience. She has previously covered an extensive range of topics in her posts, including business and start-ups.