6 Smart Dos For Loaning To Relatives And Buddies

Many people believe that it is unwise to give one’s hard-earned money to a loved one in trouble. This is because giving money and not getting it back puts the relationship at stake. If your dear one is seriously in a trouble and you have some money to lend, you may feel like helping.

It is fine to lend but you should do so as if you are giving to a stranger. It is feasible to do so if you and your money both remain safe. To ensure this, here are five things for you to do.

Give Only If You Can Afford

It is fine to practice financial mercy but not beyond what you cannot afford even if the borrower is your friend or a close relative. As the risk of not getting the money back is always high in such a case, you should take a sound decision. Are you happy to forgive the money for sustaining the relation? Even if you wish to forgive, lend only if doing so does not hurt you financially.

Give Only Cash

Do not be crazy enough to help! Help wisely! If your pal or sibling requests to take a loan by securing one of your assets or applying a credit card for use but in your name, simply reject it. Do not even co-sign for a loan. Otherwise, you push yourself towards a state wherein someone else is enjoying in your name while reducing your ability to secure credit.

So, if you feel like helping a loved one, deal only in cash. After all, giving cash to someone does not directly impact your credit score.

Stay Informed

Will a creditor give funds to anyone without knowing where it is going to go? No, right? Similarly, even you should lend without this knowledge. Asking for such details may make you concerned about hurting your dear one in trouble. However, it is practical to get this information.   

If the borrower feels upset, take it as a sign of a bad deal and simply do not go ahead with it. If you get all the details, then follow up to decide whether to lend or not. For instance, if your sibling or friend asks for money for further education, check out what is to be studied, where the person will go for that study, for how long it will be and so on.

Talk about Defaulting

Even though the borrower is your friend or sibling, it is feasible to discuss the lending terms and conditions. While discussing the terms may seem embarrassing, enough, consider it as essential to protect yourself and money.

So, talk frankly about what to do if you get a late payment or do not get money at all. Here, discuss the action that you are willing to take, such as late fees, grace time or legal action. Doing so keeps both of you informed about what will happen if the deal breaks.

Take Interest

This is another awkward action to take, as charging interest to a loved one may seem needless. However, it is the most reasonable way to defend your money. Instead of a higher rate, you will charge a fair one to motivate the borrower to repay on time. Another benefit is protection from a gift tax on the lent amount.

Get a Written Agreement

There is no telling when anyone will go against the promised or spoken words. So, it is wise to get the whole deal (terms and conditions) in writing and duly signed by both parties.


With these dos, you can safeguard your deal of lending without putting your relationship in danger.

3 Beginner Options For Passive Stock Investments

Many of us seem to have a suspicion of whether to invest in stocks or not. Although not all investors own, investing in stocks is one of the robust ways of building wealth. Thus, experts recommend to take the benefit of this investment.

However, to be on the safe side or on a low risk, beginners should start with passive investing. It is an approach wherein you purchase and hold a varied combination of assets for mirroring, not beating, the market. So, it is meant for a long-term holding instead of trading for a short period in the market.

With so many options to invest, stocks are considered among the easiest ones. Following are the three options to get started with passive investment in stocks.

Index Funds

Buying an index fund is perhaps the most common approach to passive investing. These are the funds that try to imitate the performance of a specific index. There are a couple of ways to invest in these funds. However, with a passive goal and optimistic outlook, investing in two to three index options can give you great outcomes.

Different types of accounts are available for making such an investment, of which the most common ones are a brokerage and an IRA account. All you have to do is open it at the desirable brokerage with a respectable service provider such as Vanguard and Fidelity.

Just start by investing in two or three funds and see the growth of your assortment. A simple strategy here is to choose a total-stock market and a total-bond market fund.

Retirement Plan

If you wish to start with index funds, investing in your retirement plan can be a good starting deal. While this may seem too obvious, the truth is that many of us do not even think about investing in such a plan. This is despite the benefits of reduced taxable income and the employer’s contribution towards it.

How supportive or beneficial is the latter tends to differ from one organisation to another. As the employers have authority over the retirement options you get, some are better than the rest. At times, a few companies just do not provide the most lucrative options; their options are coupled with high fees or are likely to be less diversified.

Still, investing significantly in the retirement plan provided by the employer is considered good. To ensure that you have a good plan in hand, it is essential to look for two basic factors.

First, see the target date, specifically if you are opting for passive investing. The target date can be 2040 or 2050. These funds usually come with many options according to the target year of retirement. Then, look for management fees or expense ratios. They should not be more than 0.5%.

Dividend Stocks

Well, these stocks can be a part of index funds. Nevertheless, the fact is that not all stocks in these funds provide dividends. Thus, it is wise to consider them distinctly.

If you invest in these stocks, you get dividends, allotment of some earnings of a company. This is something that you cannot expect from other stocks that do not give regular dividends. These stocks depend on their growth to make income. However, the benefit of this growth is realised in the long run.


No matter what you plan for your investment portfolio, do not ignore stocks. This is true if you intend for a long-term financial stability. The key here is to start slowly and steadily with a motive of profit in the long-run. For playing safe, passive investing is better than active investing.

3 Simple Ways To Develop A Good Credit Record Exclusive Of A Credit Card

Do you know that the youngsters of today are edgy about credit cards? These people prefer to buy by using a debit card, a third-party app or cash believing old is gold. If you are also one of them regardless of age, you are at no risk of getting into the stressful credit card debt.

On the flip side, it is challenging for you to develop a good credit status. After all, a credit card is the easiest and important tool for building good credit. Without a good credit report or score, it may not be easy for you to get a car, home or payday loans with no credit check with favorable terms. At times, you may not qualify at all for the same.

The good news is that you can still develop good credit in absence of a credit card. Here are five such ways to do so.

Report Timely Bill Payments

Most of us know that paying all bills on time is one of the essentials to good credit. This includes paying phone, utilities and cable bills on time. However, just paying on time is the job half done. You also need to report these timely payments. This is something that many of us do not know.

Unfortunately, paying monthly bills on time is something that the major credit bureaus do not track automatically. They also not get reported automatically about these timely payments. So, the only way to report these payments to any of these agencies is to contact the bill provider and request them to report the same to these agencies.

Well, this may not work, as the providers may not say yes and there is no rule to bind them for this obligation. Nevertheless, if they say yes, it definitely helps in developing a reliable payment history, which accounts for over 30% of your score.

Go for a Credit-Builder Loan

Getting a credit-builder loan or card that helps your credit rating is an effective way to borrow without having a credit rating. Herein, rather than adding money to an account and borrowing against it, you pay regularly over time and receive the full money at the end.

As the bank does not provide any upfront money, this is an advance in name only. It saves all your added money in a dedicated account. You get access to it only after you have made all the payments. Well, this would be an awful deal if you get only money at the end of the duration.

Rather, why not just put the same amount into a savings account and earn interest? However, apart from the money via a credit-builder loan, you also get something more. Whenever you pay, the bank informs about it to the credit bureaus.

Withdrawing just $200 for six months and repaying it on time can raise the credit score significantly. Just keep in mind that such loans are not provided by all banks despite them being free of any risk.

Approach a Different Credit Service

If you are making bill payments on time that your providers are not ready to report, you can approach another credit service such as FICO, Connect and VantageScore to build credit. Some of them function as free services to track a variety of your payments. They then use these details to generate an alternate score for building your credit history.

Well, it is true that many lenders will only look for the traditional credit scores and reports (by major bureaus) while lending. Thus, an alternative credit buildup may not be quite effective. Still, these service providers claim that there are thousands of lenders across the country who use alternate scores.


These simple ways can definitely help you develop a good credit rating.