Let Someone Borrow Money? Here's The Best Way To Ask For It Back

Moneylending between friends and family can cause a lot of tension—and escalate quickly. And the first thing you should realize, says certified financial therapist Robin Norris, Ph.D., LMFT, is that you might not get paid, and that's a risk taken when you lent the money in the first place: "The lender should know that there is never truly a guarantee that they will ever get their money back."

And if you're reading this before you give a substantial loan, Norris recommends outlining a repayment plan prior. "You should always set up rules for paying back at the beginning," she says. "But if that didn't happen or didn't get respected, then you find a time for a calm 'official' discussion." 

And before entering the conversation, there are a few things you need to consider yourself: What was the money being used for? "Were you helping or enabling?" asks Norris. "Was it for a medical need, like a life-saving treatment? Was it a time of crisis, like helping a widow offset a mortgage? Or did it simply come from reckless behavior, like frivolous credit card spending?"

This will help you decide the tone you should take: "The 'why' leads to the emotional response of being stern versus being caring," she says. "That being said, coming from a place of understanding is always a best first tactic." If it's the case that you were helping, you'll need to be very sensitive entering the conversation. It's likely they didn't want to borrow the money in the first place—and thus might be embarrassed that they cannot pay it back. For the latter situation, it's important to remain calm (getting angry will only make the relationship more strained) and understand that the individual might need help developing better spending habits.

"You can start by saying the following: 'I know you've been thinking about the loan, and I'd like to talk about it..." or 'I can empathize that paying me back has been a challenge, but..." says Norris. From there, you can gently talk through your challenges with the situation. "Explain your needs; express that you have to be able to take care of yourself or others, which you can't do without the money."

You can, too, explain that the situation could damage trust—especially if the loan was the result of reckless spending or behavior—and inhibit future borrowing. "Since these folks wanted to borrow money to begin with, it's good that the source they borrowed from gets replenished—otherwise it wrecks future borrowing for themselves," says Norris. "It's an accountability item."