Financial stability is important for living a comfortable life. It is not possible to keep up with a good lifestyle if you cannot afford it. Make sure that you take good care of your finances but sometimes despite all the planning people can face financial crises. To get out of a financial dark place people often opt for a loan. The loan offers immediate financial relief and gives people a chance to get back on their feet.

Getting a loan is helpful in stabilizing finances but loans sometimes go bad. If the loan is not properly planned then it can lead to serious disputes. Sometimes the concerned parties have to go to court to settle loan disputes. Hiring legal help like best solicitors in Lavenshulme is costly so it better to find ways to solve the dispute out of court.

Here are a few basic rules you should keep in mind whether you are lending the money or are the lender.

1. You should never agree on giving or taking a loan if it is not feasible for you. When it comes to giving a loan most people find it hard to say no especially if the person asking for replacement is a friend or relative. But you should only say yes if you mean it. If you say yes and later find that you cannot uphold your end of the agreement, then it can ruin your relationship with your friend or relative. Take a close look at your finances before deciding to give the loan.
   
2. You may consider relative or friend trustworthy enough to give the loan but there are other things that you need to consider as well. One important thing to decide is the size of the loan. You should only lend the money that you can afford to lose in case a dispute arises and you have difficulty in recovering your money. If you loan more than you can afford then it will put a dent in your finances which is not good. You should be ready to face unforeseeable circumstances that may prevent a person from paying back the loan. It is better to be ready for the worst and only give away money that does not jeopardize your financial situation if the money is returned late or is never returned.
   
3. Establishing a firm repayment timeline is important. If you do not mention the return date then you give the impression that it is ok if the loan is returned late. Before giving away the money you should create a written agreement that clearly states the requirements and terms of the loan you are giving. It will make sure that both parties do not have any confusion regarding loan repayment. Not putting the agreement in writing is a huge mistake because then you will not have any evidence to look at in case of agreement breach or dispute.

It is always nice if you can help a friend facing financial troubles but make sure that you can afford the help you are giving and do not destroy your finances in the process.