Should You Let Other People Pay Off Your Debt For You?

It should come as no surprise that getting out of debt is hard work.

It takes effort and self discipline to live on a budget and spend your disposable income on debt repayments. Depending on the size of your debt, and the interest rate you’re paying, it can take years to become debt free.

Most of us just have to struggle on, paying off debt as we can. The odd person, however, has another option.

Some people are offered help, from their partner, from a relative or from a friend. Help to get out of debt. They offer to square things off, helping you to get out of debt far sooner, and enabling you to start a new debtfree life. The question is whether you should accept such an offer…

A Gift or A Loan?

The first question you should be asking is whether the kindly individual who has offered to help you out is offering you a gift or a loan? And yes, there is a difference.

If it is a gift, they are offering to pay off your outstanding debts without expecting any financial recourse. If it is a loan, they’re likely offering to pay off your debt in one lump sum, yet expecting you to pay the money back to them over time.

Firstly, the gift option. This is, of course, the more generous offer. So generous in fact that you’d be well advised to consider not just why they’ve made you the offer but also how it might affect your relationship in the future.

How certain can you be that you won’t feel indebted to that person for the rest of your life, or that the individual in question won’t constantly hold this generous offer over your head for ever more? You wouldn’t want money to change the dynamics of your relationship.

If the offer is a loan, then ensure you both understand fully the repayments. Not just the size and frequency of the repayments, but also the interest rate being charged. You’ll likely want to be certain that the interest rate is reasonable, as well as making absolutely certain you will be able to meet your obligations.

There is little worse that struggling to repay a generous friend or relative who has loaned you money, and this is the sort of thing that can really put relationships under stress.

Personal Relationships Under Strain

How good is your relationship with the person offering to pay off your debt for you? If you have a strong and positive relationship then the arrangement may work perfectly. On the other hand if there is any tension, then a considerable sum of money changing hands could impact this significantly.

Try to take the time to consider your relationship with the individual and try to make an informed decision about whether the money could in any way negatively affect your relationship.

Compromised Personal Development

Paying off my consumer debt was possibly the hardest thing I ever did. And I hated pretty much every minute of it. It was like trying to swim through honey; every day was a struggle and I couldn’t wait to be free.

However when I finally paid off I debt I realized I’d gained more that just a debt free life. I’d also gained a new outlook on life, one that has been very helpful since then. I’ve learned to budget, I’ve learned the value of money, I’ve learned to control my spending habits and more.

Quite simply without this process of debt repayment I’d probably be just as broke now as I was then. If someone had just paid off all my debt for me I doubt I would have learned the hard financial lessons I’ve picked up over the last few years. I probably wouldn’t have changed my spending habits and slowly slowly would have slipped back into a lifestyle of spending more than I was earning.

When it comes to letting someone else pay off your debt therefore don’t under-estimate the power of learning to pay off your down debt. For me, it was a transformitive process, and one that has made me who I am today.

Oddly, now my debt is gone, I think that getting into debt was possibly the best thing I’ve ever done for my own personal development.

Conclusion

There are no right or wrong answers to this question. All you can do is to consider the points raised above and take the time and effort to carefully consider them in light of someone paying off your debt.

If you truly have considered the situation and believe that it works well for both you and the kind donor then why not. Equally, if you decide the effect could harm your relationship, it’s a compromise not worth making.

What do you think? Would you take money off someone else to pay off your debt? Please leave your thoughts in the comments section below…