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Article: Friends & family: rates low, but hidden costs come later.(Who's Who Banking & Finance--Lenders of Last Resort)
- Article from:
- Los Angeles Business Journal
- Article date:
- October 27, 2003
- Author:
CopyrightCOPYRIGHT 2003 CBJ, L.P. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Overview: Loans from family and friends are among the most appealing options for those in dire need. They offer instant cash, little or no interest, no collateral and no demand letter.
But you still have to see your creditor over the holidays.
"Sometimes, if a relative loans even a small amount of money, like $500, that doesn't get paid back, they'll write off a family member," said Jennifer Root, a spokeswoman for the Consumer Credit Counseling Service of Los Angeles.
Yet, in many instances, the lender has no expectation of getting paid back.
Most family-and-friend loans fall below $1,000 and are used for immediate needs like medical ...