by Bizna Brand Analyst

Back when I was in campus, my older brother once borrowed me two thousand shillings. He was in a fix and he said he needed the money urgently otherwise his operations would be screwed. Between me and poverty, only 2400 shillings existed. Since my brother promised to pay back by the next day, I gave him the 2K and remained with 400 shillings.

“Usikose kunitumia kesho. Niko chini sana.’’ I told him.

He agreed, but two weeks later, he hadn’t repaid the money. I suffered a lot. I had to skip lunches and drinks for several days and I eventually ended up hating him.  It took a while before we could repair our relationship again.

I vowed to never give a loan to family nor take one. I’ve stuck to that principle so far

It’s no secret that getting loans is becoming harder nowadays. Banks are making it harder and harder to borrow money. In fact, it’s become almost impossible for people with less-than-perfect credit to take out loans for even small purchases, including home appliances. Larger loans, for necessities like cars and houses, are basically just out of reach for these people. If you’re in this boat, you might be eyeing your more well-off family members, wondering if you can tap them for a few extra bucks until things start going your way once more.

Borrowing from family can seem like an incredibly attractive option, as the loans come with no paperwork, you won’t be penalized with debt collection calls if you don’t pay back the cash. You might not even have to pay interest. Bonus! However, there are plenty of reasons why borrowing money from the family is a bad idea. Here are just a few of those

The terms of repayment are unclear.

Loans that come with no strings can also be complicated, but in an entirely different way. You might think you have months, or even years, to pay back the loan, but the person who loaned the money might expect it right back the next month. Who is right? It’s impossible to know. You might also be tempted to think that since it’s your family member, they won’t have a problem if you don’t pay them back. Totally wrong.

You’ll be scrutinized and judged a lot.

You might be used to talking about your life and showing off your purchases with family members and in fact, you probably shared all kinds of details with your family that you would never share with your banker. However, once you accept a loan, your family member becomes a banker.

Talk of a promotion at work becomes questions about your loan payments. That pretty coat you just bought becomes a red flag that you’re not taking your debts seriously. Any financial moves you make will probably trigger some form of reaction from your family member. “Why isn’t he paying me back yet he’s taking his kids to the coast?’ Can’t he see I have need too;, they’ll keep on wondering.

Loans between family members may come with strings…..long ones in fact.

Taking a loan from a family member pretty much entitles them to a lot authority over your life.  They may request that you avoid activities that they think may hinder your ability to pay them.

They’ll wonder why you’re busy drinking or relaxing when you should be working/making money..

All these things will most likely make you feel like uncomfortable and inadequate when you’re around them. You might thus start avoiding family, which isn’t a good thing. And think about the tension at all those family gatherings. Suddenly, you’re no better off than you would be if you get a high interest loan from the bank or a shylock