When you borrow money from someone, it`s important to establish clear terms of repayment. Ideally, you`ll want to get everything in writing to avoid any misunderstandings or disputes down the line. However, there may be times when a verbal agreement to pay back money is all you have to go on.
If you find yourself in this situation, there are a few things you can do to protect yourself and ensure that you uphold your end of the deal.
1. Clarify the terms
Before agreeing to anything, make sure you fully understand the terms of the loan. How much are you borrowing? When is it due? Will there be interest? Knowing the specifics of the agreement can help you avoid confusion later on.
2. Document the agreement
While a verbal agreement isn`t as strong as a written contract, it`s still a good idea to document the terms of the loan. You could send an email summarizing the conversation, or write a letter outlining the details of the agreement. This creates a written record of the loan and can be helpful if there`s ever a dispute about the terms.
3. Keep your promise
Once you`ve agreed to pay back the loan, it`s important to stick to your word. Make sure you`re clear on when payments are due and how much you`re expected to pay. If you`re having trouble making a payment, communicate with your lender to see if you can work out a new arrangement.
4. Be prepared for the worst
Even with a verbal agreement in place, there`s no guarantee that the lender won`t try to take legal action if you fail to repay the loan. If that happens, having a written record of the agreement can be helpful. You may also want to consult with a lawyer to understand your rights and responsibilities.
In general, it`s always best to get any loan agreement in writing. However, if you find yourself in a situation where a verbal agreement is all you have, following these tips can help you protect yourself and uphold your end of the deal.