How do I get my friend to pay back my money? See the best ways to achieve it.
How do you tell a friend to pay back the money they owe you? This can be more difficult than you think. Not only does it require tact, delicacy, and a genuine concern for your friend; it also requires you to be comfortable saying an uncomfortable thing. This post will cover how to tell your friend to pay back the money they owe you, as well as how to avoid this situation in the future.
- 1 Should I lend my friend money?
- 2 Questions to ask yourself before lending a friend money
- 3 How to handle a situation where they refuse to payback
- 4 Right Steps in lending a friend money
Should I lend my friend money?
It’s natural to want to help a friend in need. But when you decide to loan him money, you’re entering into a relationship that has its own set of rules. If you lend them money, they will be in debt to you. This can put a strain on your friendship. And if they don’t pay you back, it could even damage the relationship permanently.
Questions to ask yourself before lending a friend money
How much can you afford to lend?
Your friend may ask for a large sum of money, but can you afford to lose it if he doesn’t pay it back? If you’re already on a tight budget, it’s probably best not to lend your friend money that could put your financial future at risk.
Is your friendship strong enough to survive the loan?
It’s important to assess how the loan will affect your friendship before agreeing to it. If the loan will put a strain on the relationship or change its dynamics, consider whether lending your friend money is worth it. How much are you willing to risk for the sake of your friendship?
Will he pay you back?
Make sure your friend is financially capable of paying back the loan before lending him any money. If he’s in over his head with credit card debt or other loans, consider asking him to get help from another source instead of relying on his promise of repayment. And don’t let generosity cloud your judgment.
How to handle a situation where they refuse to payback
Ask but ask nicely
First off, make sure your friend knows how important it is for him to pay his debt to you. It may be that he forgot about it or just doesn’t realize how much this means to you. The nicest way to ask for the money is directly and calmly. Say something like “Hey, I really need that money ASAP.” This kind of directness can work because your friend will know exactly what you want from him and why. He’ll also know that there’s no room for arguments or excuses.
You don’t have to confront him directly; in fact, it might be better if you don’t. Send him a text message saying that you have noticed he hasn’t been paying back his debts and that it’s important to repay your friends when they lend you money.
Remind him of the deal.
Before lending money, make sure there are no misunderstandings about whether interest will be charged and how long it will take to pay the money back. In fact, it might be wise to put those things in writing so there are no arguments later on about what was agreed upon.
Use an intermediary if necessary.
If talking to your friend directly doesn’t help, try talking to someone else who can put pressure on him — either another friend or a mutual acquaintance. If possible, talk directly to the person who owes you money — not the intermediary — so you can get a clear response from him or her.
Explain What You Expect
If the person still refuses to pay you back, explain what you expect from them. This could mean anything from an apology for their behaviour to giving you the money by a certain date. Stick to your guns—even if the person offers excuses for why they can’t pay you back yet, remind them that this is not an excuse and that they need to pay you back at some point. Be clear about what they need to do in order to get their debt
Right Steps in lending a friend money
Find out what they need the money for and how much they need.
Figure out how much you are willing to lend them and for what period of time (in days).
Calculate interest on the loan or agree on a flat rate (such as 5% of the total amount).
Decide whether your friend needs to pay back interest or just return the principal amount at the end of the loan term.
Agree in writing about all terms of the loan, including interest and repayment amounts due. Have both parties sign this agreement.
Make sure your friend fully understands everything about paying back the loan, including interest rates and repayment dates. Check with them periodically to make sure they know how much is owed and when it is due.
For some, to tell their friend to pay back their money is hard for them which is why I am of the opinion that if you can’t let go of the money, don’t borrow it. In other words, only lend people money you know you can afford to give out without much fuzz.