How risky is this 2 percent monthly interest lending?
Hi,
Many of my colleagues lend money to their relatives and friends of relatives for a monthly interest of 2 percent with some collateral like Land documents or gold. This means a minimum of 24 percent annually. How risky is this?
Never lend to relatives/friends, especially on a formal level like taking documents. Rather mentally donate if you feel that strongly.
If they are unable to pay promptly, the relation suffers and its additional headache to collect.
Also, very strong possibility that they are already borrowing from others without being transparent to all parties. There is no credit bureau check in informal lending, so they might be cheating multiple parties.
TLDR: ultra pro max more risk as compared organised debt. Some finance bro should warn you here in detail.
And why is someone willing to pay that high interest?
