Most people rely on their loved ones for support during difficult situations, including financial hardships. Sometimes, people get into financial trouble when they lose their jobs or incur many expenses. As a well-meaning friend, it helps to find ways to support your friends going through difficult times financially. In this article, you’ll find four ways to support friends who are financially stressed.
1. Send a Sweet Gift
To relieve your friend from the emotional stress they’re experiencing, you can send a houseplant. The perfect plant gift is an excellent way to leave an unforgettable impression. Some online stores offer a house plant delivery service thanks to technology which has streamlined the process of finding the best plant delivery services within your locality.
2. Help Find a Viable Solution
You can support your financially stressed friends by helping them find a solution to their financial difficulties. Doing so will give you a better idea of the type of assistance they need. Let’s say your friend is looking for money to finance a real estate transaction. Fortunately, there are several financing options available to a real estate investor. Private lending, for example, is a great option for an investor looking to make a significant investment in a real estate investment property.
Private lending is somewhat similar to hard money lending. The significant difference is that hard money loans are secured by commercial properties. Specifically, a hard money loan is considered a short-term bridge loan offered by a private individual or private lending company.
Many people take out hard money loans on a short-term basis to raise capital quickly for urgent business. The borrowed money is secured by collateral submitted to the lender. It’s important to know that big banks don’t provide hard money or private money loan facilities.
3. Co-Sign or Offer a Loan
Your loved one may be contemplating obtaining a long-term loan to meet some of their financial obligations from a traditional lender or credit union. Their credit may require them to get a co-signer. Consider co-signing on a loan from a traditional bank or online lender. Essentially, you’re lending your friend your good credit score. The legal implication of co-signing a loan is that you’re legally bound to repay if the borrower defaults on the repayment, regardless of whatever agreement you had with your loved one.
Conventional lenders report delinquent loans to credit bureaus to file on the credit report of the defaulter. Keep in mind that negative filings on your credit report can give you bad credit. The bottom line is that co-signing a loan is a significant business that you shouldn’t take lightly. If you’ve decided to offer a personal loan, make sure you have a written agreement with your loved one on the loan terms.
Generally, the terms of the loan should cover the loan amount, interest rate, payment due dates, and penalty for defaulting on monthly payments. Endeavor to spell out to the person that it’s a loan and not a gift.
4. Offer a Cash Gift
When a friend is going through financial stress, consider giving the person a cash gift to settle one or more bills, especially if it’s a short-term cash flow problem. When it comes to outrightly giving out a financial gift, decide on an amount you can afford without putting your finances at risk.
You may decide to offer the money all at once or give it periodically until your friend’s current financial situation is resolved. It’s important to let the gift recipient know that the money is a gift, not a personal loan so that you don’t create an additional stressor. As you know, debt is a major stressor for most people.