How do I know if the borrower will repay the loan?
This depends on how well you know the borrower 🧑🤝🧑
Your relationship with the borrower and the steps they take to make you feel comfortable should help you to decide if they will repay or not.
They should be able to tell you:
- Why they want the money and what they are going to use it for
- What income they have available to make the repayments
- If they have taken time to show you that the money will be sensibly used
- That they have the income to cope with the repayments
This may make you feel more comfortable? You could also ask them to provide you with an income and expenditure statement.
For everything, you could ever need to know about
Being a guarantor on a loan for someone
See our dedicated page