Taking personal loan at 13% and giving it on loan at 18% in village – Is it a good idea ?

POSTED BY Nandkishore ON June 17, 2014 6:45 pm COMMENTS (4)


This is Nanda Kishore from Bangalore working as a Software Engineer. Now Citi Bank if providing Personal Loans on low interest for 13%. I have a thought to take Personal Loan for 3 Lacks and give it for 18% interest to my friends or relatives, doing business at my Village.

I will take loan on EMI basis from Citi Bank and i will get the interest on monthly basis from my friends/relatives. Please clarify my query in detail and give me your valuable suggestions. Let me know if i am thinking wrong.



Nanda Kishore

4 replies on this article “Taking personal loan at 13% and giving it on loan at 18% in village – Is it a good idea ?”

  1. Ashish Garg says:

    I would would say very risky option. Else all in the world would have started doing it.

    Recently there was an article by Manish on the same lines, money lent to friends and relatives and the “aftermaths” of it. Trust me, you may possible end up burning your hands.

    If you take loan form bank, you are bound to pay EMI to the bank, while your relatives / friends etc may not do so with you. So in case someone defaults in payment, you can not do so with bank.

    Think about it seriously and do read the article.


  2. Raja says:

    Think if you have the repaying capacity in case the people whom you lend money start defaulting on the payments. Bank can take legal action against you for non payment, but you wont be able to do the same against the people to whom you have lent as they are your friends and relatives

  3. Hemanth Chandra says:

    It would be good idea and works well if all the people to whom you lend will pay the interest monthly and also the principal as well.

    You should be really cautious here, because your friendship might ruin because of money, you may or may not get total money…..things like this….

    What you can do is, don’t take a loan now. Just do a pilot with your personal money for 2-3 months with small amounts and if you see it is working fine for you, then you can take a loan and do the same.

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