5 Tips on Borrowing Money from Friends

borrowing money from friends

by Mike on August 6, 2013

5 ways to Borrow Money from Friends and Still Maintain Your Friendship

Money in general is a sensitive topic and whilst at times it’s difficult to make ends meet everyone needs help now and then. Finding the right person to ask needs to be thought about carefully and I would probably recommend that you seek all other avenues of borrowing money from other loan sources before asking friends. Everyone works hard for their money and while some seem to have more than others for a variety of different reasons this isnt always true. Once you get in a financial agreement with a friend it can cause strain, discomfort and stress to the friendship and depending on how good the friend is this is probably something you want to avoid. Read on for tips on how to borrow money from friends and still maintain your great friendship.

How to ask a Friend to Borrow Money

 

  • Choose the right friend. Make sure your friend is financially stable in their own life and has money to spare. If your friends are living paycheck to paycheck it’s rare that they will be able to lend you money without causing financial upset to themselves and their own responsibilities.
  • Put it in writing. Before speaking to your friend try writing down the amount of money you need to borrow, the reason why, and milestones / timeframe on when you will pay them back. Be specific about the details to ask a friend to borrow moneyso  you both know how you plan to pay them back. In one lump sum or in installment payments throughout a specific time frame. This will show your friend that you are serious about paying them back and allow them a time frame to adjust their own finances.
  • Offer your services. A great way to repay a loan (or some interest) from a friend is by offering services. Do you have carpentry skills or landscaping skills? Offer to do your friends lawn or help fix things in their house. It may not always work out in advance but you may be able to agree to swap an amount of money of the loan for each task that you can help with. Don’t forget to make sure you do an excellent job so that your friend is happy and there are no misunderstandings.
  • Keep communication open. Notify your friend a few days before you make the payment, to put them at ease and assure them that the money is on its way. If you find that you are not able to pay them back at the time frame agreed upon make time to sit down with your friend, explain your situation in detail and try to give them at least a portion of the amount you owe them so that your friend understands you are trying your best.
  • borrowing money from friendsPay your friend back. This tip is obvious, but it’s the most important. It’s best to pay your friend back with a money order, paper check or with some type of written agreement that the loan has been paid in full. This will avoid any confusion or misunderstanding if your friend happens to forget that you already paid them, this happens frequently and can be the biggest cause of the end of your friendship or the awkward feelings if it doesn’t go that far.

Borrowing money from friends may be convenient and keep you from having to pay interest as with a loan from a bank. But if things don’t go well it puts your friendship at risk and you have to ask yourself if you are not able to pay back your loan are you willing to lose your friend over it?

Asking a friend for money is not an easy thing to do and it should be a last resort after considering all other loan sources. Paying long term interest on a loan from a bank or even getting a cash advance loan may be well worth it if it secures your friendships.

Money problems come and go and everyone does their best to solve them to the best of their abilities. Good, trustworthy, long lasting friendships are not easy to come by and should be treated with the utmost importance. Make sure if you plan to ask a friend to borrow money that you feel confident that it won’t ruin your friendship.


Borrowed money from a friend? Had a bad experience with lending to a friend? Let us know!

***Photos thanks to twodolla, matryosha & darrenleno***

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