Getting Your Money Back Without Losing Your Friendship

Whenever you lend money to friends or family, there’s a decent chance you won’t see that dough again.

One reason could be that expectations and repayment terms weren’t discussed beforehand — for which the giver and receiver are both at fault — but another reason could be that the person to whom you lent money just isn’t courteous, which is not your fault at all. (See also: Borrowing From Friends: The Friendship Killer)

Alas, while I’d generally advise you to err on the side of caution before you part with your hard-earned cash to anybody for personal reasons, sometimes giving someone a personal loan may be necessary. I get it. Things come up. Still, if you were generous enough to help that person out when they were in a financial bind, they should be grateful enough to pay you back.

It’s never easy asking someone to give you your money back, but it has to be done — lest you get walked all over and become an ATM for everyone you know. To make the situation a little less awkward, here are a few tips.

1. Keep in Touch Regularly

You have no reason to stop talking to the person you lent money, but they sure do — especially if you’ve lent them a large sum of money and they have no means of paying you back in the near future. With that in mind, make sure you maintain regular communication — as frequently as before, at least — so they’re constantly reminded of the debt they owe you just by seeing you or talking to you. Some people will try to avoid you in this case, but don’t let it happen. If someone seems like they’ve taken your money and run, it’s not a good sign. Continue the relationship as it was before so you can eventually get what you’re owed.

2. Don’t Pester at First

You shouldn’t lend someone money if you’re going to hound them two days later demanding that you be repaid. This is where the expectations of repayment play a large part in how you go about settling the debt. If the person to whom you lent money agrees to pay you in a week, let a week and a few days pass before reaching out and reminding them about the mutually established deadline. Going easy at first will help keep the lines of communication open.

3. Ask If the Money Solved the Problem

If too much time has passed and the borrower hasn’t brought up repayment, you have every right to bring it up. Just try to do it tactfully. With genuine concern, ask if the problem has been solved. For instance, if they needed money to pay an electric bill, ask if it’s been paid and if it’s back on track. This will not only remind the borrower about the debt and let him or her know that you haven’t forgotten, but it’ll also give you insight into whether this problem persists and if the person is capable of paying you back in a reasonable amount of time.

4. Be Frank But Polite in Your Request for Payment

If hints aren’t working — and sometimes they won’t, especially if people are flat broke and simply can’t pay you back — it’s important to stand your ground. When asking for your money back, be frank but polite. Let them know that you still care about them, but it’s important that they hold up their end of the bargain so the situation doesn’t escalate to the point that will damage your relationship. If you haven’t established a deadline by now, this is the time. Talk it over together and decide on a date that is acceptable to you both, taking into consideration your friend or family member’s need for a certain amount of time to earn the money to pay you back.

5. Offer to Accept Payments in Installments

Another option — and perhaps an even better one than hoping for a lump sum on a specific date — is to suggest a payment plan or installments. It will take you longer to recoup your entire loan, of course, but you will increase your chances of getting the entire sum back by allowing the person to pay small amounts over a period of time.

6. Don’t Let Them Off the Hook

Whatever you do, don’t let this person off the hook. Most people will appreciate the gesture you made to help them out (and pay you back eventually), but some will try to "forget" about it and hope you will too. Don’t be a sucker — not even for something as small as a $20 loan. The amount may seem insignificant, but the repercussions could ruin your relationship two-fold: Not only will you harbor resentment, but that person may start hitting you up more frequently and for larger sums. Loan the money and get it back — bottom line. You want to be a good friend, not a poor one. Two broke people do not happy endings make.

Have you ever lent someone money? Did you get it back? What did you do? Let me know in the comments below.

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Getting Your Money Back Without Losing Your Friendship

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Guest's picture

I have lent a family member money. Fortunately when we lent this person the money, we went into the situation with that mindset of it turning into a gift if we didn't see the money. Good thing we did as we never did see the money returned and we still have a good relationship with this family member. I would recommend not loaning money to family or friends. Either GIVE them money or say NO, you will be glad you did.

Guest's picture

I have let friends borrow money but always small amounts and I normally got them back. However, we did promise to rent our townhouse out to a friend and things got hairy... I actually wrote today about why you shouldn't mix family, friends and money (or business) today on my blog. If you're interested, here's a link :

Guest's picture

If I loan money to a friend, I usually just tell them it's a gift and write it off. It's not worth losing friends over. But also, when I do grant a small loan to someone and they don't pay it back, they never get to borrow again.

Guest's picture

I don't lend money - I give it - or I don't

It's not worth the stress on a friendship to me and I'd always regret the choice

Guest's picture

I don't know. When dealing with friends and family I use one extreme or another.

For a really large amount of money, I get a note with clear payment terms and a schedule and collateral if possible. I'll even set a slightly better than market interest rate. This can be good if for example you need to get ahead of another creditor on the collateral and it reduces the opportunity for any misunderstanding. I won't do something like this unless it is really important to the friend/family member.

For more modest sums, anything I can afford to lose easily, I just tell them "here, I want to help, take it". If they insist it's a loan - usually for their own pride and self respect so I'm not going to fight that - I respond "OK, pay me back when you can" and then I forget about it. Completely and utterly.

Donna Freedman's picture

'Tis better to have loaned and lost than never to have loaned at all? In other words, I've lent money that really helped people and been repaid, and I've also lent money that I never saw again.
If someone regularly hits you up for $20 (or more!), this person has a problem and you may be enabling rather than helping. You should also get any loan in writing -- seriously!
Lest you think I'm just a big ol' Grinch, let me assure you that I have agonized over such loans. An article I did for Get Rich Slowly on this very topic garnered more than 200 comments, so plenty of people identify:
And more how-to-lend tips in an article I did for Money Talks News:

Guest's picture

Asking for money back from a friend/relative is really hard. Your advice #5 Accept Payments in Installments had worked for me. I got my money back from a friend by asking her to transfer $100 back to me each month. It took her 3 years to pay me back, but I didn't lose a friend nor my money.