Make sure you’re able to meet one-on-one. You don’t want to embarrass your friend. Send an email, text, or call and say something like, “Do you have some time to meet and talk this weekend?” If you want to give them a heads up on what the conversation is about, you can say something like, “Can we meet up Friday to talk about that loan I gave you a few months ago?” If you want to make sure your friend is comfortable, let them pick the location. Say something like, “I wanted to talk about that loan I gave you awhile back. Can we meet at your place or somewhere close by to talk about that this week?”
Insist on a precise answer to your direct question. Responses like, “I hope to get it back to you in the next few months,” are not adequate. If your friend avoids responding or responds vaguely, push them to set a deadline. You can say something like, “I’m understanding the next few months as meaning no later than three months from today. Can we agree to that?”
Try saying something like, “I have to pay my property taxes next month, and I’m really depending on you repaying me to make that payment. ” You can even say something like, “My budget has been stretched pretty thin because of the loan I gave you, and repaying it would help me get back on track financially. ” Remember, you don’t need an actual reason to want the money back. The loan should be repaid, but this is another way to improve your odds of getting your friend to pay you back without losing the friendship.
You could say something like, “It would be helpful to me, if you could make a payment towards the loan today. " If you’re worried your friend may truly be having trouble repaying the money, say something like, “I know you’re still struggling, but is there a small amount you could pay me now?”
Before your meeting, think through some possible payment plans you think may be feasible for your friend. Presenting these to your friend will take the pressure off them to come up with these ideas. Say something like, “What amount would you be able to get by without each month?” Try to help your friend figure out when they will be able to make payments by saying something like, “Do your bills come out at the first of the month or towards the end? You can pay me at the opposite time, to make repayment easier for you. "
Don’t shy away from asking your friend to commit to a repayment plan or from asking them to sign a formal agreement, especially if you have loaned them an amount of money that is significant to you. Start by saying something like, “This may be overkill, but I want to make sure we’re both on the same page to repay this loan. I wrote up something to help us both stay on top of it. " Make sure your friend understands your initial document is just a suggestion, and walk through possible changes to make repayment easier. You may say something like, “I know you have a vacation planned for May, would it be helpful for you if we skipped this month?”
In some cases, it may even be appropriate to ask the friend to perform services in lieu of payments. For instance, if you need to go out of town, you can say, “I’m leaving for a business trip, and will be gone for ten days. Could you water my plants and watch my dogs? I’ll deduct $300 from what you owe me. ” If your friend is trying to pay you back, but struggling to financially, offer them the opportunity to help you instead. Say something like, “I really appreciate you trying to pay me back in the time we agreed upon, but would it be easier for you to watch my kids for me this weekend while I’m at a conference instead of paying me this month? I’d really appreciate the help. ”
The letter should detail the exact amount owed, length of delinquency in repaying the loan, other attempted methods to recoup the loss, and potential court dates if the money is not repaid. For instance, your letter could say something like, “On December 3, 2015, I loaned Joe Smith $600 for his construction business. I asked for repayment by October 3, 2016. I have asked for repayment in person, in writing, and attempted to make a payment plan. Mr. Smith has been unresponsive. I am seeking legal action to recoup those losses, if I am not repaid by December, 3, 2016. At this time, we will schedule a court date to discuss the matter in the presence of legal counsel. ” If your friend responds to the letter and pays the debt in the aforementioned time frame, there’s no need to continue legal action.
Do your research into online or app based claims services. Most are reputable, but others are just out to take even more of your money without helping you recoup losses. You can read online reviews, check with the Better Business Bureau, or look for information on the site about the lawyers who will be assisting you.
If you paid the person in cash, you may have more difficulty proving the loan ever happened or that you got the money from reputable sources. If you can show a bank withdrawal for the amount on the date in question, this may be adequate.
Splitzee, Splitwise, and Square Cash are your best options, when the money lending situation is for a shared expense. For instance, if you pay the monthly bills in your apartment and have roommates who pay you back. Venmo, PayPal, and Google Wallet are better for large amounts of money. These applications allow you to send bills and reminders to your friend, and most of them have no fees, if you’re simply transferring money from bank to bank. [12] X Research source
Start by asking something as simple as, “Why are you asking me for a loan?” It may be uncomfortable, but ask your friend, “Do you have a large amount of outstanding debt?” Before you lend them money, it’s fair to expect them to be honest about their financial situation. Ask if they can agree to a repayment timeline before lending, “I understand you’re struggling financially now, but when do you think you’ll be back on your feet?” Perhaps most importantly, ask you friend what they’re doing to get out of debt. Say something like, “What are you doing right now to change your financial situation? Can you get a second job or take on more hours at work?”
