How To Get Your Money Back From Friends Or Family

When your friends or family ask for money, you are placed in a difficult situation. It may be challenging to get your money back (if even possible at all).

Personally, I’ve learned my lesson over time. If I do give someone money, I never expect to receive it back.

This makes it easier for me. I’ve got to be willing to never see the money again and give this person a gift.

In your case, you’ve already let your friend or family member borrow money and you want to get your money back.  You never intended for them to keep the money.

According to a survey from Creditcards.com, “59 percent of those who lent money say something went terribly wrong”. 

So you aren’t alone.

Let me give you some suggestions on how to get your money back – based upon a few hard lessons I’ve learned.

Establish The Rules To Get Your Money Back

Your mind has to be willing to adjust enough to consider this a business transaction.

There needs to be something in writing that has been agreed upon by both parties. (Note that none of this article is legal advice and if you feel as though you need to consult a lawyer, please do so. This is solely based upon personal experience.)

But you’ve already made the loan. Hasn’t that opportunity passed you by? Perhaps.

However, it is absolutely acceptable to ask for this loan agreement after the fact. If the borrower truly wants to repay you, then they will have no problem with the agreement coming after they’ve received the money.

If the person that owes you money isn’t willing to sign a document, shoot them an email with

Business Mode

It’s important to start with “business mode” early on. If the friend/family member feels that you are not going to follow up to get your money back, they may think that you never want it paid back.

You can ease up over time on “business mode” if the payments progress as they should. However, you need to start out strong with a written agreement and expectations. Even if it’s on a napkin.

So flip the switch if you’ve been lenient. Your switch is flipped as soon as you decide to put your foot down and present the agreement.

Make it known that you do expect it to be repaid in the timeline set forth. Also let your friend know that you won’t question anything as long as the payments are made as promised. 

As soon as they aren’t, you will begin asking and you really do not want to be put into that uncomfortable situation.

Remember that it’s perfectly fine to create the agreement after the money has been distributed. You want your friend or family member to understand that you do still expect to get your money back.

Switching Your Mindset

Most likely, this is a person that you care deeply about on some level. This could even be your parents or children. Hopefully you wouldn’t have let them borrow money at all if you didn’t care about them.

When you talk to them about your borrowed money, try to keep negative emotions out of the equation. Be honest.

Let them know what you’re feeling. Set aside a specific time to discuss the transaction so that they have time to mentally prepare.

You don’t want your friend or family member to feel like every time you talk, you’re bringing up the money they owe you.

It’s almost like you have two personalities. First, you’re the friend/family member that you have always been. The one that cares and is there when someone needs them.

Second, you’re the lender of their loan.

Keeping these two “mindsets” separate will help you keep this friendship long after the loan has been repaid.

The Ugly Possibilities

What could go wrong:

The Bad: Your friend will not agree to a written agreement.

Response: You share your disappointment. You may lose this friend – but was it a friend that you even wanted in your life? You may not be getting this money back. 

See section below on “Other ways to help get your money back”.

The Bad: Your friend doesn’t pay and acts like nothing happened.

Response: This is why it’s important to set rules early on. Yes, it’s going to be more work for you. It’s now your job to regularly remind them and hold them accountable.

The Bad: Your friend ghosts you.

Response: Is this person bringing any positivity to your life? It’s so incredibly sad that they have taken advantage of you like this. If you truly need the money back ASAP, I would reach out to the friend and share why you need it back. Playing a sympathy card may get you somewhere.

The Bad: Your friend pays great at first and then stops.

Response: Reach out as soon as possible after the payment hasn’t been made. You have to let them know that you are watching. It’s much easier to get them back on track in the beginning. What is important is letting them realize how closely you are monitoring the payments and that you will reach out if it is late. Yes, it’s uncomfortable, but it’s just “normal business communication”.

The Bad: Your friend thinks they borrowed a lesser amount.

Response: This is the importance of having a written agreement. However, if you do not have one and you both cannot come to an agreement, agree to whatever they think. You know never to lend them any money again.

Other Ways To Help You Get Your Money Back

At the point of nonpayment, I would consider what else may be happening.

I’ve learned in my life that friends that want to borrow money, usually have some sort of reason why they need the money. They may have an addiction or truly have a job that is not paying their day-to-day bills. 

I do want to note that sometimes there are deeper issues. The best help you could give your friend or family member may be simply sitting down with them and getting to the root of their problem.

Could you research solutions to help them overcome what you uncover?

I do feel that if someone is reaching out to me for money, this gives me reason to know what the true problem is. It’s an open invitation to ask any question about money that would be off-limits normally.

If someone needs money to pay their mortgage this month, I’ll ask if they can really afford the home that they are in.

What’s the equity in the house? Should they consider selling and downsizing so they aren’t so tight on cash moving forward?

I’m only giving them a temporary solution by lending them money. 

What about the months to come? What lifestyle changes are they planning to make so that they can dig themselves out of the situation they are in?

If all else fails, offer alternatives. 

If they can’t pay you in cash, is there something else that is as valuable as money to you? 

Think of the skills that this person has and use them. It’s better than receiving nothing.

You May Need To Let Go

Your friend or family member may never pay you back.

This is the #1 reason why I don’t lend money to anyone. If someone asks me for money and I want to help them out, I will only give money as a gift. I let them know on the front end that there’s no need to pay it back.

I do not need any avoidable stress in my life.

Money has ruined a friendship of mine. I can never get that relationship back to the way it was before she asked me to borrow money.

This is a really hard lesson to learn. You may need to let it go in order to maintain a relationship with the person who borrowed the money.

Final Thoughts On How To Get Your Money Back

Unless you want to receive legal counsel, you may not ever get your money back.

I’d rather be tough in the beginning and then ease up later. You could start out being easy at first, but being tough later will be more difficult.

You gave this money to this particular person because you care about them and you do not like seeing them go through a tough time. 

The most real thing you can do is to tell this person all of your true feelings. 

If you think something else is going on, you have the right to question this person.