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Many people encounter the need for a loan, but factors like poor credit can complicate this process, often leading them to seek help from family or friends. This situation can strain relationships, as loans may or may not be repaid, leaving lenders feeling vulnerable and without clear repayment expectations. A solution to mitigate such risks is a family loan agreement, which is a legally binding document that outlines the payment structure between the lender and borrower. Although it may feel unusual to approach relatives with a formal agreement, it can help maintain relationships while ensuring that funds are repaid in an organized manner.
