Most people don't think about formalities when lending money. If they're lucky, they get their money back. Unfortunately, the opposite often happens, and the borrower disappears without repaying the loan. Because of this, it's a good idea to depend on the law rather than luck.
How to manage loans
There is an unspoken rule in lending relationships — don’t lend more than you’re willing to lose.
In case the loan is larger we see only two options: lend money observing all formalities or don’t do it at all.
Let’s focus on the first option. It’s always a good idea to get the agreement down in writing even when it’s a friend or family member asking for a loan. You should be careful because they can easily misunderstand the whole point of it and take offense. If this happens, emphasize the fact that this is an ordinary formality rather than an issue of personal trust. Anyway, don’t neglect the documentation. The paper makes the whole process transparent, legally protects your money and is a reliable guarantee that you’ll get it back.
There are specific ways each country regulate the lending relationship. So before you lend money be sure to examine which formalities are required in your country.
If you are borrowing money, it is also important to observe the formalities. The lender could declare that they have not been repaid and use the court to obtain the funds a second time.
Thus when it comes to lending or borrowing money always remember that there is a real chance that you can lose it or be forced to pay twice. That’s why it’s so important to be rational and put all agreements, conditions and other relative information on the paper.
Let's Add a Debt in Moneon
Debt tracking is included in the premium package. To add a loan in the iOS version of Moneon go to the «Loans» menu and select «I am owed» or «I owe» depending on the situation. Then press the brightly-colored «Add loan» button in the lower right corner of the screen. If you have the Android version you can add a loan as a lender or borrower right from the main summary screen. Select «Add» above «I owe» or «I am owed». The next steps are the same for both applications:
- Enter the amount of the loan in the necessary currency.
- If you are the borrower, indicate the person you owe the money to. On the other hand, if you have given someone a loan, indicate the person you lent the money to.
- Enter the time frame of the loan, including the day the money was provided and the deadline for repayment.
- In the «Notes» section you can add any important information about the loan such as special repayment conditions or penalties in the event of a delayed payment.
You can always edit your loans. If a loan is being repaid in installments you can gradually reduce the size of the loan. To do this, press the «reduce loan» button in the necessary loan. If you suddenly borrow more or the borrower is late with a payment and penalties or interest come into play the size of the loan can also be increased easily using the «increase loan» button. Finally, once the loan has been repaid, press the «Loan repaid» button. The loan will then be added to the «loan history» section. You could just delete it.
Track your bank loans
You can also use debts in Moneon to manage your credits. Create a new loan in the «I am owed» section and set the total amount of the loan. In this case, the repayment date will be the date of the next payment so we know when to remind you. After a monthly payment, reduce the amount of the loan by the size of the payment and move the repayment date up a month. That way you will always make payments on time.
Now you know how to lend and borrow properly and how to use Moneon to manage debts. Lend wisely, and you'll definitely get your money back.