Hi guys,
Hoping to get some advice on my situation. I currently have 2 personal loans through banks that I am madly trying to pay down (bad debt) – $25,000 (interest rate 14.40%) + $10,300 (interest rate 13.40%) = $35,000. Total weekly payments are $235. I do not have any savings yet, as I have been putting all spare funds into reducing this debt.
Friends of mine have very kindly offered to lend me the $35,000 with an interest rate of 10%. They have explained that, to them this would be a kind of business proposition, as 10% is a reasonable return on their investment and more than they are currently getting from having it in the bank.
Some more info:
The loan would be drawn up as a proper legal document.
I have secure full time employment.
I am hoping to improve my situation (bad debts and savings) in order to be able to start investing in property.
What would be your thoughts (pros an cons) of such an arrangement? Also, would I be best to put any additional funds into paying down debt or start saving for a deposit?
Any help would be greatly appreciated!Hi LBH, Personaly I don't like getting help from freinds and family as this can turn bad sometimes and also they can think they have something over you, but as long as there aware and your aware that it is business and this is a business deal then it could be okay,
If I was in your shoes and I was paying 14% interest I would deffinitly look at a deal at 10%
The other thing you would need to check is to make sure that your current loans don't have break fees because if they do it may not work out any better for you at the end of the day.If your freinds have more spare cash they want a good return on I may be interested, I would pay 9-10% P/A but I would be chasing $100,000 plus
Preferably $500,000 secured against property
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