It is normal that people don’t have it all together all the time and that some friends may need a financial helping hand. If it happens that your friend ends up having a financial crisis and asks you for a loan, there are some factors that you need to have in mind before lending the money, all in order to preserve the friendship and make this situation less awkward than it needs to be.
If the borrow-lend situation is uncontrolled or unclear, it may make the relationship between friends cold and draw them apart. To avoid that, here are some tips on how to lend money to a friend who really needs it, but without serious consequences for your friendship.
1. Make sure everything is clear and there are no misunderstandings. Before actually lending the money to your friend, talk about the conditions and determine the payback date which is convenient for both of you. If your friend or you are forgetful, make sure that you have a paper trail and that everything is written down, so both of you can stay objective. If you have all the facts on paper, there is less space for misunderstandings or arguing. Of course, if your friend doesn’t intend to pay you back, no paper will make them do otherwise, and that is why tip #2 is important.
2. Think of the money as a gift. You need to be aware that there is a chance that your friend will not pay you back the money you lent them. If you think about it, you will get less angry and frustrated if you don’t expect the money to be returned to you. If you do get the money back- great. If you don’t- you didn’t hope too much, so you won’t be too disappointed. If you can give this money without expecting it back, make sure that your friend knows that and feels no pressure, since if they can’t repay you they might start avoiding you because of feeling ashamed, and that will make your friendship colder. If your friend is really in need and you giving them money will help them solve a burdensome problem, and not just delay it for a short period of time and make a basis for more loans, you shouldn’t feel bad about it and it shouldn’t burden your relationship.
3. Don’t lend additional money if you haven’t been repaid. If your friend hasn’t paid you back for the first time and asks for more money promising that they will pay you back soon, don’t lend them the money if you want to save your friendship. Especially if the reason of their borrowing is not something important like paying a hospital bill or rent, but buying something that is not essential, like a new phone. If you do lend them the money again, especially if you could use the money you gave them, your friendship will suffer the consequences.
4. Remind your friend of the debt. But do this in a friendly way, don’t fight about it if you want to save the friendship. If the amount of money you lent to your friend is more than you would be willing to lose and consider a gift, remind your friend politely that they should repay you. If the amount of money is large, you can agree to be repaid in installments, as it may be hard for your friend to pay everything back at once.
Unfortunately, even if you follow all these tips there is no guarantee that your friendship will stay intact. Your friend might have more financial problems and turn to you for more money and this can put your friendship to test. If you can, try to aid your friend in other ways, like helping them get a job, or helping them find a more long term solution to their financial issues.