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How to Handle a Loved One Who Won’t Pay Back a Loan

Lending money to a loved one can be a tricky situation. The situation can quickly go from eagerly helping a friend or relative in need, to not wanting to speak with them ever again because of non-payment. The subject of money has divided friends and destroyed families. And yet it’s hard to see your loved one in need and not want to help them out.

Have you lent a loved one money and several weeks after the agreed pay-back date, there are zero signs of them paying you back? You’re probably wondering about a couple of things:

  • How should I ask them about it?
  • What if they never pay me back?
  • Should I involve other family members or friends?
  • I really need my money back. Should I take this issue to the authorities?

You might be offended because you expect better from your loved one. You feel like they are taking you for granted which in some cases might be true. However, there could be genuine reasons they haven’t paid you back. It’s a sensitive issue because important relationships are at stake. This means you must approach it tactfully. The following steps will help you handle this situation:

1.     Send Them Polite Reminders


The first course of action should be to simply remind them about it. Your friend or relative could have genuinely forgotten about the due date for the loan. You could send them a text or email. Be kind, but also be firm. To increase the chances of getting your money back, your reminder should include an element of urgency.

Say something like this: ‘Hey (name), I’m glad that I could help you out with that loan last month. I’m wondering if you’ll pay me back soon because the due date already passed. It would be great if I could get the money this week since my rent is due.’

Another way to put it would be ‘I’m really depending on that money to pay off my taxes at the end of this month.’ Not only is this a reminder, it also stresses that it’s important for you to get the money back as soon as possible. You might get an immediate apology and payment.

2.     Write Down a Payment Plan


What if you don’t hear back from your loved one after the reminder? They could be embarrassed about not being able to pay you back in time even though they want to. Or maybe they responded but acknowledged that they didn’t have all the money at that time.

Visit them or suggest a meeting where you’ll both come up with a payment plan. This will make repayment more manageable for them while ensuring that you still get paid. Make sure you document and both sign this plan. It must include the amounts they will pay, the dates on which they are due plus terms and conditions. This structure keeps the borrower accountable.

3.     Obtain Collateral


In case the borrower is having a hard time sticking to the payment plan, your next course of action should be to obtain collateral. This can be in the form of an item or asset that you can hold onto until they pay you back. Preferably something they would be uncomfortable without. For example, a television, laptop or iPad. You might also want to agree with them that you will sell the item to recover the money if they don’t pay you back.

4.     Deduct Amount for Services Offered


Your loved one might really want to pay you back, but they are struggling. Offer them the chance to provide a service which you would have otherwise paid for. Services like babysitting, housesitting or mowing your lawn. You will then deduct the value of the service from what they owe you.

You could say something like this, ‘I appreciate your prompt payments for the past few months. I have to work late this week. Would you mind watching my kids? I’ll deduct $ 400 from the balance you owe.’ Or ‘I’m traveling to visit my sick mom and I’ll be away for a month. I’d appreciate it if you mowed my lawn and watched my dogs? That will amount to $1000 off what you owe me. ‘

5.     Let Them Pay for You


If you and your friend or relative still go out together for fun, let them pay for your movie tickets, drinks and meals. This could be an easier way for them to pay you back.

6.     Gift the Money to Them


Your loved one might completely fail to pay you back with all the above steps. Or they might only be able to pay a portion of the total loan. If not getting back the money does not affect you significantly, the best thing to do would be to gift it to them. You will probably feel relieved that you don’t have to keep asking for the money and move on. This will relieve the borrower as well.

A Note on Taking Legal Action against Family and Friends


Some people will sue their loved ones to get back their money. Most times it’s because they loaned them a significant amount of money and the borrower’s life is significantly affected. This course of action will cause stress, waste of time let alone the end of the relationship. It comes down to how important your relationship is to you.

Your Relationship is More Important than Money

Your friendship or relationship is more valuable than money. While you go about getting back your money, it’s important to keep this in mind. You might get tempted to be angry and approach the borrower in a way that will bring awkwardness in the relationship or worse still its demise. While you’re getting them to pay you back, you can maintain your relationship in the following ways:

1.     Reflect on the Importance of the Relationship

Think about how important this person is to you. Would you still want them in your life for years to come? Is your friendship worth any amount of money, even a million dollars? Will this issue matter in the next few years? Will falling out with this person to affect your relationship with other members of the family?

2.     Exercise Patience and Forgiveness


First of all, decide that you will not be resentful over the money. It will only be a load on your emotional health. The borrower might be a poor money manager. They might need your help to get their finances in order so that they can start paying back the loan. However there are service those are very easy in lending money to bad credit borrowers like www.justrightloans.com , so you don’t need to take help from family or friend in most of the cases.

Also, they could suddenly end up in an unforeseen financial difficulty. Show patience and understanding. If they don’t pay you back, tell them exactly how it makes you feel but forgive them anyway. You’ll keep your relationship and avoid becoming bitter.



Lending money to friends and relatives is not advisable unless you are willing to lose one or both of them. If you’ve already given them a loan, use the above steps to get your money back. While you’re at it, remember to maintain your relationship with patience and understanding. The borrower already feels bad enough for not being able to pay you back.

Look at the bright side, there’s always a lesson in a difficult situation. The next time a friend or relative asks for a loan, give them an amount of money that you’re willing to lose. You can also make alternative suggestions for loan sources. Keep in mind that your relationship is far more important than any amount of money.