How to Deal with Friends or Relatives who Borrow Money

Have you ever been into a situation where a friend or a relative needs financial support so they want to borrow money from you?

Well, I could no longer remember how many times have I lent money to friends and relatives and didn’t get my money back. 

Usually, I don’t lend my money easily because it’s exactly on my budget most of the time.

However, it’s really hard to refuse a family member, relative, or a friend. It’s just so hard to say no, don’t you agree? 


So how do you tell that friend or relative that you cannot lend them some cash?

If you know that the money will only be spent to some luxuries, it’s fair to refuse. But if the person borrowing money really needs it for some emergency, then you can loan the money to them.

The only part that should be determined is how long the money will be repaid.

Sometimes, it’s awkward to remind them about the loan. So the best thing to do is be wise in lending your money.

Know the person’s nature when it comes to money and be straight-forward, of course, in a good way.

If you will refuse, at least do it in a nicer way so that you will not risk your friendship.


4 Things to Consider before you Lend Money to your Friend or Relative

Below are some of the common factors that you need to consider when someone wants to loan some cash from you (whether a friend or a relative):

1. Your own values system – Is it important to help the person who’s in need of emergency financial assistance? Conversely, is it important to preserve your current funds? Do you also need certain amount of money that the borrower wants to lend? So, what’s more important?


2. Relationship with the borrower – Know how important the person is to you. If you’re close, then try to make the best decision for the both of you. If you want to refuse, can you risk the friendship you have with them?


3. Risk of non-payment – Before anything else, it’s important to determine if the person is reliable or not. Can they afford to keep their promise when it comes to paying the loan? How long will they repay you?


4. Your own financial needs – When lending money, you need to consider the chances that the person will not return your money. Is it okay if they just forget about it? If they don’t pay you back, can you afford to lose that specific amount of cash?


Should you lend money to your friend or not? 

If you have a tight budget, it’s convenient to refuse and just tell them the truth because I would do likewise if they borrow again.

It maybe hard to refuse a friend or relative who is borrowing money from you, but if you really have no money, then tell them honestly. 

Don’t borrow money from another friend or relative just to lend it to somebody who’s borrowing from you. I’m sure it’ll be more complicated in the end. 

It’s not easy to earn an income nowadays and there’s lots of important spending to make just to survive a day.

Bottom line is, you can either say no or accept that the money you will lend them is sort of a “give away”.

If you have extra funds or if you can afford to “lose” the money that you’ll be lending to your friend or relative, then by all means do it. 

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