Definition of Friendly loan:
Friendly loans are the most common type of loan agreement, whether it be among friends, family, or work associates. In many circumstances failure to repay such loans cannot be legally challenged, as most friendly loans are made in good faith between closely associated parties. These loans are also not reported to any credit bureaus and do not reflect on one's credit score.
A friendly loan is a financial agreement between associates. This type of financing is known as a friendly loan because the agreement is usually made between friends, family, or acquaintances. These types of loan agreements are rarely legally documented and stipulations are usually verbally agreed upon.
An agreement - often verbal - between associates, friends or family members that carries a certain amount of risk due to the lack of documented terms.
How to use Friendly loan in a sentence?
- Drawing up a formal promissory note or a loan agreement is a way to protect the lender if the borrow defaults on the loan.
- Friendly loans do not show up on credit reports. .
- Friendly loans can be risky and may cause a rift between lender and borrower if the debt goes unpaid. Friendly loans are often done between friends and family members. .
Meaning of Friendly loan & Friendly loan Definition