Content

• Steps
• Method 1 of 3: Closing a Trade
• Method 2 of 3: Money and Friends
• Method 3 of 3: Other options
• Tips
• Warnings

It may seem that borrowing money from a friend is easier, safer, and more convenient than borrowing money from a bank or other organizations. However, this can lead to irreparable consequences if you do it in a hurry, without thinking through everything to the smallest detail. Before asking a friend, consider if you have any other options and take the matter with all the seriousness it deserves to keep both your finances and your friendship in order.

Steps

Method 1 of 3: Closing a Trade

1. 1 Take everything seriously. You may not have to sit opposite each other in suits, as in a bank, but you need to take it just as seriously. Financial matters are very important and should be handled accordingly.
   • Explain why you need money. No, you don't have to make a PowerPoint presentation, but you will need to clearly and clearly describe to your friend why you need the money. You shouldn't risk your friendship by explaining that you just need them and that's it.
   • Assess the amount you would like to borrow and your ability to repay the debt. Calculate all possible expenses in advance: for car repairs, for moving to another apartment, for training courses, and so on. Don't think that the phrase "I'll return later" will be enough. Create a payment schedule and time frame.
2. 2 Insist on favorable terms for the friend. The friend will probably decide not to take interest from you and not make a contract (or feel that he cannot do this), and although this will be a plus for you, for the sake of maintaining the friendship, it is important to let him know that you want to take money at fair prices for both parties. conditions.
   • Pay interest. This will show your friend that you are determined to return his money, and it will serve as gratitude for his consent to enter your position. Insist on the average interest among banks. Otherwise, you will simply ask for a gift.
   • Offer to leave something as a deposit. This is another way to prove that you are serious and that you will get your money back. Offer as collateral a TV that your friend likes so much, or earrings that your friend often asks you to wear.
   • Discuss the terms and conditions regarding late payment. Let your friend know that you will do everything you can to make sure there is no delay, but also have a plan in case it does. The result may be an increase in interest or a fine, or something less formal - for example, invite a friend to cut his grass in his country for a month.
3. 3 Write down all the conditions. Even in the modern world, nothing is more proof of the intentions of two parties than a signed piece of paper.Draw up a document that outlines all the conditions and consequences.
   • If you want to write a more formal document, there are articles on WikiHow that will show you how to do this.
   • You can even certify the document with a notary. It is inexpensive, but it gives you legal rights and responsibilities.
   • If you are satisfied with a less formal document, an email or handwritten text would work that would include the exact amounts, deadlines, interest, bail, and fines. This will help both of you feel confident about the deal.
4. 4 If you are borrowing money for a business, describe your goals. If you need money for a new or existing business, stipulate this condition.
   • Will a friend's money be a loan or an investment? Does the loan mean that the friend will be eligible to participate in the business, profit, loss and risk?
   • If you do not want your friend to be involved in your business, be direct about it, otherwise you may inadvertently drag him into an unsuccessful venture.

Method 2 of 3: Money and Friends

1. 1 Choose the right person. Surely you have several people to reach out to, and you may decide that the one with the most money is the best for you. But it is important to consider not only the amount in the bank account, but also the character of the person.
   • Take money from a friend whom you know well, whom you trust and with whom you can freely talk about any topic. Remember, money is a sensitive issue, so you shouldn't be embarrassed about it.
2. 2 Don't haggle. Even if you love it, now is not the right moment. Thank your friend for offering you help and you will not regret it in the future.
   • State the exact amount you need, but be prepared to look elsewhere for money. If you need 800 thousand and a friend can give you 200, that's better than nothing. And this is definitely better than trying to squeeze more out of a friend.
   • Give up the deal instead of trying to get your way. Of course, it will be embarrassing if you ask for money and then refuse, but it is better to do so than to force your friend to do what he does not like. Tell them that you need to reevaluate all the options.
3. 3 Be prepared to be rejected. This is a continuation of the advice that you should not bargain, but it is worth mentioning it separately. Do not put pressure on a person who does not want or is not sure that he should be lent money.
   • Pressure is an attempt to take advantage of a person, and this is a direct path to the loss of a friend.
   • You will not only ruin the relationship, but also face the fact that you will be offered less favorable terms than those you expected. When you hear a refusal, contact another person.
4. 4 Make debt repayment your top priority. You should take the loan seriously and try to always pay the right amounts on time.
   • Set aside money to pay off your debt every month (or any other set time frame). Place your money in a separate envelope, transfer it immediately via internet banking, or take it to a friend every month.
   • Try to pay off the debt at least a little earlier than necessary. This will help you strengthen your friendship.
5. 5 Separate financial and personal relationships. Do not bring money to a party or other event, and ask your friend not to talk about it in such places if need be. Discuss this issue in private so that your friends don't know about this financial transaction.
   • You should not refuse to talk to a friend for this reason if you have not repaid part of the loan on time. Tell him what stopped you from paying and explain what you plan to do. You need to talk about this in a suitable setting. Contact a friend yourself - don't make them remind you.
   • If you value your friendship, treat your friend with respect. Be open and honest in both financial and personal matters.

Method 3 of 3: Other options

1. 1 Analyze your financial situation. If you feel that you need money (be it a bank loan or a loan from a friend), first think about why this happened and if you have other ways to get funds.
   • If you regularly run out of money, review your budget and expenses. There are many programs to help you with this, but a pen and paper will suffice.
   • Be clear about your financial situation before you decide to ask for money. You may have other options. At the very least, you will know exactly how much money you need and whether you can return it on time.
2. 2 Look for ways to save money or get it from other sources. Perhaps you can give up satellite TV, start buying groceries for shares, earn extra money in the evenings, ride a bike alongside public transport? Think about what you can do yourself before involving another person, especially a friend, in your financial matters.
   • WikiHow has articles on how to save money. For example, you can regularly transfer money to a savings account, eat at home, buy groceries in large quantities, use less electricity and water, find a better option for renting an apartment, and have less expensive entertainment (for example, going to free events and hiking).
   • You can also take a second job, sell unwanted items, or participate in paid surveys and research.
3. 3 Use all other options first. Only contact a friend as a last resort. There are risks associated with these loans, but at least by not borrowing money from a friend, you will not jeopardize the friendship.
   • You may be intimidated by the high interest rates, the many restrictions and tough conditions of the banks, but take a closer look at them: banks offer a variety of loans and lines of credit that may suit you. Moreover, it will enable you to build up a good credit history.
   • In some countries, there are special services that allow you to borrow or borrow money from other people directly, most often anonymously (but this is not a prerequisite). If your country has such a service, check it out.
   • If you need money for a special project, try setting up a crowdfunding campaign on the Internet.
4. 4 Think about potential troubles. It is difficult to imagine that a relationship with a close friend can deteriorate because of money, but this is possible. Many people advise against borrowing money from friends so as not to lose friendship.
   • For example, in America, people borrow $ 89 billion from friends and family every year. 95% of Americans lend money, but only 43% of these people received their money back in full.
   • Money may or may not be the root of evil, but it can certainly provoke suspicion, envy, selfishness, impulsiveness, and other emotions that can destroy relationships, marriages, and friendships.
5. 5 Check with someone or ask for help. Friends are ready to help each other, so they can give you money even if they themselves don't want to. Give them the opportunity to help you in another way, without forcing them to think about whether they should become your lender.
   • It is possible that your friend has also experienced financial difficulties in the past, so ask him for advice on ways to save money.
   • Your friend may also be able to offer you a part-time job. Ask and find out.
   • Let your friend know that you've looked at your options and asked other people's opinions before you go to him for money.

Tips

• Be prepared for rejection. Your friend may not have the amount you are asking for, or he may think it will hurt your friendship. It doesn't matter what the reason is, your friend has the right to refuse you. Try to come up with a backup plan.
• If you find that you can't pay off your debt every month, ask a friend to change the terms. You may pay less each month, but increase the payout period.It's best to pay everything on time, so make sure you can do it. If you want to change the terms, you must know exactly how much you can pay and when. Do not ask to change the conditions again after two months.

Warnings

• Keep your expenses under control. Your friend gave you money for the necessary things (if it really is), and not so that you buy yourself whatever you want. If you pay back on time, your friend will not be upset that you went to the movies or ate in a cafe. But if you buy expensive items or eat out at restaurants all the time and are already one or two overdue payments, your friend may decide that you are using it and think twice before giving you money.
• Don't avoid a friend if you can't pay the monthly amount. Let the explanation of why you cannot give the money away is not a pleasant thing, but running away from the problem only aggravates it. You put your friend in an awkward position, because he will be forced to look for you and remind you of duty. If you do not explain to your friend what is happening, he may think that you have decided not to pay at all. If you stop communicating with a friend, your friendship will be at risk, so talk to him even if it is difficult for you to do so.
• Do not lie. Be as honest about debt or non-payment as possible. If your friend realizes that you are cheating on him, the friendship will come to an end.