Relationship Lending 101

Relationship lending

Relationship Lending can be a sticky mess. So here’s a guide for all the people that have been taken advantage of for their generosity in lending money.

This blog pretty much came about because of a situation I was put in because a friend avoided paying me back the money she owed me. She would use every excuse imaginable and would simply not reply to any message if it concerned the loan.

So I put it to you, have you lent your friend some money and in the end it reached that point where you’ve had to chase it up so much you’ve just given up?

My issue with Relationship Lending

Let’s think about it rationally. The first point I’d like to make is that it’s not just you, things like this happen to a lot of people and it’s just life, or more like one rotten individual that decides to take advantage of you. Also, relationship lending is a constantly increasing way of loaning and borrowing money, and with no formal documentation, situations like mine constantly occur. 

I know people will say it’s a good learning experience, but heck, it shouldn’t be seen that way. As a child, I was brought up to repay or give back what I borrowed. It’s just common decency. Where I’m from it’s definitely not a thing to avoid paying someone back. It’s not just rude, but that person is being selfish and potentially risking a relationship.

Let’s face it, it is an experience we learn from. As we hear and learn about experiences like this we learn to be a bit more careful with our money and whom we lend it to. These next few steps are what I’ve come up with that help me loan between family and friends in the safest and most manageable way.

Look at their history

If it’s a friend you’re lending to, have a solid think about past events. Specifically think about situations where splitting bills, buying rounds and offering to pay have arisen. For example, if you’ve offered to pay for something of theirs do they offer to split it or even repay you, or do they just let you pay it? If you buy rounds do they actually buy ‘the next round’? Do they offer to pay for you when you go places?

Another key aspect of this is to consider how close you and this person are. Are they someone you enjoy spending time with and constantly catch up with? Maybe they’re the kind of person that doesn’t stay in touch and waits for you to contact them. Maybe they’re a family member like a parent or sibling. Or maybe they’re a distant European cousin saying they’ve got cancer and need help…..seems legit right!

Look who’s asking!

Are they asking or are you offering? Always consider who’s initiating the loan. I’m not saying don’t lend to people that are asking, however, suss out the importance of the loan to them and the reasoning for the initiation.

Let’s put it this way, if someone’s whining to you about needing money and they’re obviously hinting at you loaning the money to them, then maybe it’s an ‘enter at your own risk’ situation.

Some people may approach you in a reasonable manner. For example, sit you down, ask for a loan and offer repayment details straight off. They’ve obviously thought about it, really need the loan and want to prove to you they can be trusted.

If someone you’re friends with but don’t see often asks for a loan, to me, I can see red lights flashing. Maybe they’re a genuine person and simply trust you over anyone else, but be sure if you do progress you have other methods (listed below) in place to make sure it’s repaid.


Let’s put it this way if they honestly need the money and have every intention of repaying the money then they won’t mind if you charge an interest rate or even ask for some cash on top of the loan for agreeing.

Personally, I don’t use interest as a way to make money off someone in need, however, it’s more of a security mechanism for me. By them agreeing to the interest/interest rate they’re saying, I need the money and this interest is an assurance for the lender.

Document it!

Our society is constantly becoming more tech savvy, so it doesn’t surprise me that there’s an exponential growth in fintech (financial technology). One in particular, that I would definitely recommend is!

When I started working at Credi and understood the platform and thinking behind it, I realised that I’d never make this mistake again. Signing up for a Credi account is simple and it’s FREE! It’s a great little tool that helps to make relationship lending formal, safe and manageable. The platform even has adaptive and unique features such as E-signing, repayment schedules, email & SMS notifications, interest rates, negotiation and much more.


With these key steps, I find relationship lending a much easier and less stressful process. I’m constantly lending to my siblings and now that I follow my own little guide I no longer have to chase people up or have arguments surrounding unpaid loans.

I hope these steps on relationship lending help you lend and borrow from friends and family.


Am I doing it right? The struggles of ‘Adulting’


You may have heard people use the term Adulting before. When my generation usually uses it we refer to growing up, becoming responsible and taking our rightful place within society. However, there is definitely a whole more to this term and I’m typing this blog as we speak to explain to the struggle of ‘adulting’.

Adulting is the term we use when we start to get our s**t together. Once the studying is done, this is where the BIG step to becoming an adult begins. It’s the times where we discover there’s a new expense or payment we had no idea of exists and that our parents are no longer paying for. It’s for the times when we have to get ourselves out of our own sticky messes, work proper hours and pay for our own necessities to life – rent and bills being a couple. Adulting is the limbo state where we go from being a young adult to a somewhat-contributor-to-society-that-pays-minimal-tax.

But let’s face it, sometimes life gets tough and taking the step to being an adult is more of a leap, off a rock, that’s on a cliff, thousands of feet high. So there shouldn’t ever be any shame if we have to resort to going to the ‘Bank of Mum and Dad’. Right? Well if you have no intention of paying them back, or even plan to pay it back as slowly as possible, then sure it’s probably not going to be a fun experience. BUT, if you show them you can manage your finances, make reasonable repayments periodically and negotiate terms, then why the heck not!

That’s where this sweet new fintech (which I’ve recently discovered means financial technology) called Credi comes in. Think of an online platform that allows you to formalise loans and then manage them. An awesome website where you can create, negotiate and accept loan agreements with people you know- like good old ma’ and pa’. It’s even got fancy pants features like repayment schedules, interest options, SMS and email notifications, Esigning, negotiating features and SAH MUCH MORE!

Credi doesn’t just help you manage your loans on your own, it protects relationships and helps you avoid disagreements. Simply put, “it’s changing the way we lend to each other”.

So let’s put it this way, adulting is hard and let’s be honest it’s a lot harder than it uses to be. So I think an important step to becoming an adult is to take baby steps- instead of a leap- and hey those steps may include borrowing money. Loans are great and all but if your parents are financially stable enough surely there’s a way to work something out.

So don’t be too hard on yourself, work hard and have ambitions for the future but most importantly of all, enjoy your life. We need money to pay for necessities and things in life, but we should let it consume us. And hey, when the going gets tough, our parents will always be around….and so will Credi- the platform that will help eliminate the nasties that come with loaning from family and friends.


The pros and cons for borrowing from BOMAD


Amelia Murray from the Telegraph goes into detail about the risks and benefits of using BOMAD. She looks into the aspects many wouldn’t consider when lending from family and friends such as an affordability test, the idea of going bust, interest rates, hidden costs, miss-selling loans and finally if a child gets married.

Credit: Amelia Murray

 allows you manage the issues presented in this article, our platform makes using BOMAD safe, manageable and protects relationships in the process.



Bank of Mum and Dad: how to help your children buy a home

buy a home

Love Money sets out some great points as a guide for parents to financially support their children and help them buy a home. The Bank of Mum and Dad is ever growing and becoming a world wide phenomenon in relationship lending, now funding over a quarter of all home purchases. BOMAD is constantly helping their children get a foot in the property market and buy a home. However, for many parents, this may not be a feasible option. That’s why Love Money sets out this helpful guide, to help you find the best way to help your children without putting yourself in financial strain. Love Money looks into aspects of helping with a mortgage deposit, gifting money, lending money, guarantor & joint mortgages, and offsetting savings.

Credit: Love Money Staff



A great way to make sure secure the money that you lend to your children and friends is to make sure it’s documented and managed. Credi’s platform helps formalise and manage your loans and takes the worry out of lending large sums of money., a vital piece of fintech, is one of the fastest growing lending platforms in Australia. We’re an online platform that helps all you millennials and the ‘Bank of mum and dad’ (BOMAD), set up a loan online, document the details, create a repayment schedule, and formalise everything with an agreement and E-signing component. Our fintech platform has already helped hundreds of Australian businesses, friends and families formalise their loans and then manage them – protecting their relationships, avoiding disagreements.



Sacrifices millennials would make to own a home Cartoon

This awesome graphic highlights the sacrifices millennials would make to own a home. If you were a first-time buyer, what would you give up to own a home?

Sacrifices Millennials would make in order to own a home

Source: HSBC




Wealth gap rises as home ownership falls

Wealth Gap Rises

The Resolution Foundation completed research into the wealth gap in Britain, establishing that half the nation’s wealth belongs to one tenth of adults as property market and ownership declines. This decline, in turn, plays a key role in the return of the rising wealth inequality across the nation.

Credit: Michael Savage





CREDI – Powering “The Bank of Mum and Dad”

Tim K Dean
Credi Pty Ltd
0448 617 280

Over $1.7m of loans created within the first month of launch.
Perth, Western Australia: The Bank of Mum and Dad is not just about a loan for getting on the property ladder for first-time buyers. It is the tip of a large financial iceberg.

Research carried out for Credi by RMIT shows that the informal lending market extends into billions of dollars per year in the US, UK and Australia.
The Australian public lend in excess of $1.65billion each year in unprotected, informal loans

  • ⅓ of first-time buyers get help from friends and relatives
  • In the US 2.3 million, start-ups have been funded by friends and family
  • UK and US have similar scales of relationship lending
  • Credit from family and friends is the 2nd most common form of credit in the US

Loans between related parties are built on relationships. As long as a relationship remains good, the terms of the loan are met, but should the relationship sour, the loan sours also.
After a two tier build phase, Credi launched in April 2017 as a loan management platform to enable members of the public to build, negotiate, share and manage personal loans in one platform. delivers loan documentation, negotiated to a formalised loan agreement, repayment reminders and ongoing loan management – powering “The Bank of Mum and Dad”.
Tim Dean CEO says “We want to save relationships from the strain of financial dealings by turning informal agreements into credible, manageable and formal ones. We believe that by looking after reminders, calendering and contracting on behalf of the lender and borrower we are removing the most fraught aspects of relationship loans “, he added ” In the past people either did nothing to formalise their agreements, which is fraught with risk, or emailed and called to communicate their wishes leading to misunderstanding and confusion, or at best downloaded a loan template document that they passed between themselves – documentation that was not understood, properly completed or stored for future reference if needed. Credi does all of this and way more in one place, seamlessly. Two parties can set up, negotiate and agree on a contract in minutes.”
Since launch, Credi has documented over $2M in loans, and have $3M “pending”. Tim Dean commented, “It’s early days, but the loans we are seeing broadly mirror our research – from a $650K loan between family members to upscale a residence to loans for cars, holidays, laptops Apple watch and even to fund a start up!”

Credi is built for individuals but is releasing a partner version for finance professionals over the coming weeks, targeting accountants, book keepers, financial planners. Tim Dean commented ” We have a number of businesses lining up for our partner version. We will roll out a comprehensive loan management system, adding to the Credi platform, including secured loans, entity management and automated bank payment reconciliation, that they can promote to their customers and in due course administer for them.”
About Credi Pty Ltd: Credi is a Financial technology business, not a marketplace lender. Our mission is to change the way we lend money. We want to empower people to help each other and take control of their financial relationships without creating friction and stress.
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