Asking a friend to borrow money should be only done as a last resort. Try to save money in other areas, such as canceling vacations, cutting back on entertainment costs and eating only at home before you borrow money from a friend. For example, your friend may feel resentful if you borrow money and still take that trip you planned. Before you ask to borrow money, figure out the exact amount that you need. Don't borrow more than you absolutely need since you want to have the ability to pay back the loan as soon as possible.
Step 1
Choose the friend that you ask wisely. Entrepreneur Magazine suggests that the friend from whom you ask to borrow money should never have been in a past conflict with you. If emotional baggage is involved, borrowing money may ruin your friendship. The friend should have trust in you while also having the resources to afford to lend you the money.
Step 2
Let the friend know exactly how you plan to use the money. If it is a personal loan, let her know what debts you plan to pay off. If it is a business deal, draw up a business proposal detailing the investment.
Step 3
Explain how you will have the ability to pay back the loan. Point out any bonuses, commissions, and so forth, that you plan to use toward the repayment of the loan.
Step 4
Put all details in writing. Your friend may feel more comfortable if all details of the loan are put into a binding contract. Include the loan amount, repayment details and both of your signatures on the document. You can also use online social loan websites that facilitate the lending process between you and the lender by providing a promissory note, repayment start date, payment amounts and any interest attached to the loan.
Step 5
Accept a "no" answer. Not all friends feel comfortable lending money to others. Respect your friend's decision without holding a grudge against him.
Things You'll Need
- Loan contract
Member Comments