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Young Woman Asking for a Loan


How to Request a Loan From Friends and Family

It’s hard enough needing money in an emergency but having to ask for help from friends or family can be even harder.  Urgent, unplanned needs can cause an uncomfortable “I told you so!” conversation or maybe you have an, ahem, history of borrowing money from friends but not paying them back on time. Or at all.


There is a right way to request a loan from friends and family and, equally important, a right way to ensure a good outcome (the loan gets paid back in full!) so that both parties are comfortable with the arrangement.

Begging is never cool. Ask for your loan with dignity!


Requesting Your Loan


Be truthful.  Don’t lie about what you need the money for.  Be clear how much is needed and why – this will go a long way to making the lender comfortable with your loan request.  


Offer to pay interest.  If you are expecting the lender to loan you money out of the goodness of their heart, you may meet success.  However, your positioning will be much greater if you lay out the terms including an interest rate and when you will pay.  Be flexible with the lender as they may have slightly different expectations. If they counter offer your request, you’re on your way to a successful loan agreement!


Document the loan in writing.  The greatest cause of conflict between personal loan lenders and borrowers is lack of documentation.  Documenting the loan terms in writing provides clarity on the terms.  It also holds the borrower accountable in the event of legal issues and some assurance that the lender will get paid back.  As the borrower, don’t be afraid to put your loan terms in writing! If you are hesitant, then you probably shouldn’t be requesting a loan. 


Put up collateral.  Collateral is something you own (such as property or a car) that you provide as a guarantee that you will repay the loan.  If you default, the collateral asset becomes the property of the lender. This is known as a secured loan.  (Learn more about collateral for loans.) 


Don’t insist.  The person you are asking may not have the funds available and doesn’t want to admit it.  Perhaps they have had prior bad experiences loaning money to people and are afraid to do it again.  Regardless, it is their call 100% if they are willing to loan you any money. If they are unable or unwilling, move on to prospect lender number two!

Crime doesn't pay. Be a responsible borrower so that your friends don't start calling you ``Crime``


Be a Responsible Borrower


Being a responsible borrower will go a long way to maintaining a strong relationship with the lender as well as ensuring your own fiscal health.  For additional guidance on ensuring a good loan outcome, see our resource on avoiding the pitfalls of friends and family loans.

Pay on time.  Don’t be late for a payment and don’t unexpectedly under-pay.  Unless you have collateral to offer, don’t request a second loan while you’re already paying off the first!


Communicate.  If you do run into a problem paying the loan as agreed upon, let the lender know as soon as possible.  Call and let them know when they will receive payment and then follow up in writing so that there is a record. Be sure to thank them for their flexibility and then be absolutely certain that you follow through!  


Pay back early.  There is nothing that pleases a nervous lender more than receiving their loan back early.  And yes, loaning money to friends and family is a nervous affair – check out some industry stats on the frequency and payback rates of personal friends and family loans.

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