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Asking a friend or relative should be the last option to bridge your financial gap. Most personal loans don't need legal paperwork, but if the lender wants one, do it.

Here are some basic rules so you don't lose a friend or a nice relationship because of financial woes.

1. Exhaust all other options first

Do everything in your power to tide over the financial crisis prior to taking a personal loan. Eliminate unnecessary expenses such as dining out, monthly subscriptions, or exorbitant grooming expenses. Watch your grocery list; start a budget and follow it. Call your bank to set up other payment arrangements which can ease your monthly responsibilities.

2. Never demand or negotiate.

After discussing your financial woes to your friend or relative, they may be convinced in lending you some cash. However, it is impolite to ask more than what they offer you. If you mentioned that you need Dh5,000 and your friend can offers you Dh2,500, do not ask for more.

3. Prepare yourself for rejection.

It stings to hear 'No' from your close ones. They may be really good friends but they have no obligation to lend you cash. Any kind of rejection can be tough to handle, but when it comes to borrowing money, do not take it personally if a friend says no. Your friend or relative has his or her own expenses and obligations too, and these take priority in comparison to your needs.

4. Offer to pay an interest.

Offer to pay an interest or pay back in large installments to compensate your friend or family for lending you money, and therefore forgoing any income they might have gained from the same amount. Most friends or relatives may reject your offer to pay an interest and simply would like to get the money you owe them on time.

5. Document your loan.

After the agreement, create a spreadsheet that documents a realistic schedule for paying and the amount of payment you can manage. A timetable will make it easier for you to arrange the money and save him or her the awkward call to follow up on your payment.

6. Always pay on time.

Be considerate. The person who lent you the money has other expenses too. Pay the loan off earlier than expected to show that you are a person who keeps his or her word. Inform your friend or relative in advance, if you cannot pay on time due to unavoidable circumstances, so both of you can make adjustments.

7. Value your friendship and relationship.

Make an effort to keep your personal relationship intact and not affected by money matters or bad decisions. Trust is your strongest bond with another person and borrowing money should not limit your relationship to financial conversations. This is what you need to consider prior to requesting a loan.

Pay the good deed forward. Who knows, someone may need your assistance in the future. It may not be monetary, but you can offer your service, your time and resources for the favour given to you in the past.