Things to Think About Before You Loan Them The Money
Your friend has asked you for money, and now you have some things to consider. It’s a good idea to think it over. Your friends are people you trust, but money can be an awkward topic for most people. It’s best to have a game plan ahead of time. Make sure you’re comfortable loaning them the money. This includes how they’ll pay it back, and the steps you’ll take if they don’t pay you back. None of this will guarantee you’ll get your money back or keep your friend. But it’s the best plan to do both!
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Can You Trust Them to Pay You Back?
When a friend asks you for money, the first thing to evaluate is if you trust them. That doesn’t just mean you can trust them with a secret, but trusting them to pay you back in a reasonable amount of time. Do they have a steady job? Have you loaned them money before? These are questions to ask yourself that can help you avoid an awkward moment in your friendship later. If you consider the loan carefully beforehand, and you don’t believe they have the resources to pay you back, you’ll be able to gently tell them no before it gets to the point that they can’t pay you back. You don’t want to be in a position to not get your money back or lose your friendship.
Think of a Payment Plan
If you’ve decided that your friend is trustworthy with money and has the means to pay you back at some time in the future, the next thing you need to do is come up with a payment plan. You can devise a plan that you and your friend are both comfortable with and that they can reasonably stick to. If it’s a larger amount, it can be split up weekly or monthly. If it’s being paid back at one time and not in installments, you can set a hard deadline for when it needs to be paid.
Write Down the Plan
After you’ve figured out a plan that you’re comfortable with and that your friend can stick to, write your plan down. This can be as simple as making a list with the amount and the repayment terms. It could be a good idea to get a lawyer involved for a larger amount. Getting a lawyer involved doesn’t have to be intimidating. You can casually talk about it with your friend and encourage them to get a lawyer. Representation would typically only be necessary for a larger amount, but you should take any precautions to feel comfortable with the loan.
After You Loan Them The Money
Now that you’ve loaned them the money, what happens now? Trust with your friend becomes crucial because it’s time to wait. You’ll have to wait for your friend to come through on their end of the deal. While you’re waiting, there are some things you can do to ease your mind.
Use an App for Easy Transfers
For the easiest way to send and receive payments, try using an app. There are several secure, popular money-sharing apps to choose from. Most banks even offer a secure transferring platform between people. Using an app for payments is a great option for several reasons. You won’t have to meet up with your friend weekly to get cash or a check, and you won’t have to deal with depositing anything after. The app will send the money directly to your account. Using an app also helps you keep an official record of all your payments and the total amount you’ve been paid back.
Keep Open Communication
It may be difficult not to worry about getting your money back after you give your friend the money. Remember the reason you let your friend borrow the money in the first place and that you have that trust with them. Talk to them and check-in, but try not to be overbearing. Give your friend a chance to meet the terms of your loan on their own without too much prodding. If payments become really late, or you don’t think your friend is taking paying you back seriously, it can be time to take action.
What Happens if They Don’t Pay Back the Money?
So, your friend borrowed the money, but they aren’t paying you back. This is the worst-case scenario when loaning money to a friend, and it can be a very difficult situation to handle. Thinking it through, making a plan, and writing it down is the best way to avoid it happening, but it can still happen. If your friend isn’t paying you back, here are some things you can try.
Setup a Time to Ask a Friend to Pay You Back
Remember, this is your friend. If they aren’t paying you back, there’s probably a reason. Set up a time when you can talk somewhere neutral and private. Allow your friend to explain their situation and listen respectfully. This could be a time to change the repayment plan and give your friend an extension if you’re financially able. You want to make sure you have this talk in person. Limit the conversation over text or email. Even though it can be good to have a record of the conversation, you don’t want it to feel too casual. A sit-down meet-up for lunch or coffee is the best option.
Don’t Beat Around the Bush -Ask a Friend to Pay You Back
In communication with your friend, you want to be upfront and firm with how you’re feeling and what your expectations are. You also want to remember that this is your friend that you’re talking to. Money can be a tough subject between friends, and it can make loaning money difficult to talk about, but this is someone you care for and trusted enough to originally loan money to. At this point, though, the money has already been loaned. To remedy the situation, being direct and compassionate is the best way to get your money back and keep your friendship intact. Make sure they understand that you need the money back now and remind them of the original terms you all discussed. Hopefully, this will be the only reminder they need, and they’ll get back on the schedule of repaying the loan.
Decide What Matters Most
You’ve got to make a decision about what matters most in this situation. It can boil down to the money or your friendship. Now that the money has already been lent, you’ll have to decide what actions you want to take if they aren’t paying you back. For larger amounts, this could mean taking legal action against your friend. This is when it’s extremely important that you have documentation of the loan, the terms you agreed to when loaning the money, and that your friend acknowledges these terms. It’s important to be prepared if you plan to take legal action, but there are also steps you can take before it gets to that point.
Depending on the amount, you might be willing to work with your friend and let them pay their debt in other ways. This will depend on what you need, but it could range from yard work to house sitting or having your friend be your Uber for a while. This is a great solution if you have services that you typically pay for that your friend could do for you, so you’re paid back, and it takes away the immediate financial stress on your friend.
Find Financial Help with Max Cash Title Loans Today
If you lent your friend money while you were doing well financially, but now they haven’t paid you back, and it’s put you in a tough spot, Max Cash Title Loans works to connect you to a title loan today.5 You can find out more about our title loan process and fill out our inquiry form . You can easily see if you pre-qualify today. It’s simple, easy, and we could get back to you before your friend does.