How To Deal With Friends Or Family Who Borrow Money From You

Darryl Bachmeier
Jun 22, 2019

One way or another you will have a situation in which you must deal with friends or family who borrow money. Due to economics and many other reasons, this is more common these days than ever before. It is easy to loan money to another person, but should you do it? The answer is yes and no. There are factors to consider and there are times when you will have to say no. Today we will teach you all you need to know about this matter.

Should you give money or not?

The first thing you will have to do in this case is to decide should you loan money or say no. To get the answer, consider how important that person is to you. Why he or she needs the money and how reliable that person is. He can get a loan from a bank, which is regulated and safe so keep that in mind. The most important thing here is can you afford to loan money? If you will have to make sacrifices in order to help a friend or family member the answer is no, you should not loan the money. Don’t forget that most people believe that you will give that money as a gift rather than something you will get back. That’s why we used the word give instead of loan in the subheading!

Yes, it is hard to say no, but if you or your family will suffer from that, the answer is obvious. Another, important thing to add here is that you shouldn’t feel morally obligated to loan money. If you want, can and you fine with a risk of not getting that money back, loan the money. Nevertheless, in most situations, the answer will be negative and you should not loan money.

Believe it or not, there are more reasons why you shouldn’t lend money to a friend or family than why you should. Some of those reasons are quite obvious. It will make gatherings awkward. A borrower may consider the loan as an irrelevant thing and far from his priority. You can even lose a friend or at least end up with a poor relationship. The same issues apply when loaning money to a family member. Don’t try to be too direct with a borrower. Ask indirect questions about the loan, the repayment plan, and when you can get your money back.

Consider repayment plan

How that person is going to give you money back? Are you two going to make a plan or rely on a word? A wise decision is to write some sort of a repayment plan on a piece of paper and sign it. This can help you in many ways but it is some sort of weak insurance. Ideally, you will create a proper repayment plan with the help of a lawyer.

When working on the plan, consider how much a borrower can give you back per month and the deadline. If a person misses one payment, it is likely he or she will miss many more. Also, consider how he will give you back the money. Will he use PayPal, cash, or some other medium? Don’t forget that except cash, all other forms have fees that may decrease the money you get back.

Be prepared for the loss

Loaning money is always a risky situation. Most people who do this will never see the money back while some may get a partial amount. If a borrower cannot repay the loan, you will need to negotiate and find an optimal solution where he or she can give you the money back in the future. Here is essential not to invest your time and energy into the financial problems of a borrower. You cannot change anything and these are not your worries. Instead, focus on how and when he can give you money back.

In rare cases, a person may simply run away with the money. You two don’t have an official agreement on the loan. You cannot do legal actions for this issue and you cannot do anything. The key thing here is not to feel bad. You are a good person in this story and you did a moral thing. But, consider this as a lesson and try to get as much experience as you can. The next time someone asks you to borrow money from you, the decision will be probably more accurate.


Now you know how to deal with friends or family who borrow money. It is a hard decision we all must make at some point. Sadly, the answer is usually negative and you should avoid this. Chances are high you will lose money and energy for nothing. But, in rare situations, this is the right thing to do and can end up with a positive outcome. Consider all the points from the above and you will make the right decision every single time.

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