The Enlightened Borrower’s Loan Agreement Series: Episode 2 – How To Ask For A Loan

01/06/12 2:50 AM

Episode 2: How To Ask For A Loan

There are various approaches to successfully asking for a loan. LendingKarma offers a rather effective one: a friendly loan proposal document that can be presented in person or via email. LendingKarma’s loan proposal document introduces the reason for the loan, provides the loan proposal summary, and offers a potential payment schedule.

It is recommended to stray away from impersonal types of communication (i.e text messaging). One great advantage about communicating over the phone or in person is that it allows immediate feedback and assessment on how willing the person is.

It would be smart to answer the following questions when creating your loan:

  • What will the loan be used for?
  • How much money is needed?
  • *How much money can I afford to borrow? (look at you DTI-debt to income ratio; discussed more below)
  • How will the loan be paid back?
  • What will the repayment schedule look like?
  • Will collateral be used for the loan?
  • Who pays for fees related to documenting and servicing the loan?
*DTI = amount of money coming in vs. money going out


$1,000/month in bills
$4,000/month in net income
$1,000/$4,000 * 100 = 25%

Guidelines for DTI:

36% DTI or less is considered good financial shape.

42% DTI or above is considered poor financial shape.





Carefully address these issues and you will be better prepared when asking for a loan.

Best of luck!


“You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you” -Dale Carnegie

Check out episode 3: How To Structure A Loan To Protect Your Relationship



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One Comment on “The Enlightened Borrower’s Loan Agreement Series: Episode 2 – How To Ask For A Loan”

  1. LendingKarma Blog – A Balanced Approach On How To Successfully Execute A Loan Agreement Says:

    […] check out part 2: How To Ask For A Loan […]

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