Banks have tightened their lending standards, so it is more difficult to borrow money—even for those with strong credit histories. Some people are turning to friends and family to borrow funds, but Pennsylvania Institute of Certified Public Accountants cautions that smart steps are needed to prevent the loan from damaging a good relationship.
Consider alternatives
Borrowers who fail to repay bank loans can face legal problems; those who can’t make good on loans from friends or family can be hit not only with legal trouble but also the loss of a personal relationship. It is always a good idea to think about all your other options before approaching someone you’re close to for a loan. Try more than one bank, for example, or explore the borrowing possibilities at credit unions or other sources. It may also be possible to cut back on your spending instead of taking a loan or to postpone plans for a big purchase until you have saved the money you need.
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