Borrowing isn't automatically bad — it's borrowing without thinking it through that traps people. Whether it's a bank loan or a favour from family, a few honest questions protect you.

Before you borrow

  • What's the total cost? Not just the amount — the interest and fees over the full term.
  • What's the real interest rate (APR)? Compare like for like.
  • Can I actually afford the repayments, even if my income dips?
  • Do I need this, or just want it? Borrowing for an asset or emergency is different from borrowing for a want.
  • What happens if I can't pay? Read the consequences before, not after.

If you're borrowing from (or lending to) friends or family

  • Agree the amount, repayment plan and timeline in writing — even informally. It protects the relationship.
  • Only lend what you can afford to never see again.
  • Be honest about whether it's a loan or a gift, so nobody's quietly resentful.
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The relationship rule

Money between friends is where friendships quietly die. If you lend, mentally write it off; if you borrow, treat repaying it as sacred.