Lending Money to Friends: The Do’s and Don’ts

Lending money to friends can be a tricky situation, as it can potentially damage the friendship if not handled properly.

Here are some do’s and don’ts to consider when lending money to friends:


1. Clearly establish the terms of the loan

Before lending money, be sure to clearly establish the terms of the loan, including the amount, the interest rate (if any), and the repayment schedule. This will help ensure that both parties understand the expectations and avoid confusion.

2. Communicate openly and honestly

Communication is key when lending money to friends. Be sure to have open and honest conversations about the loan and any concerns that either party may have.

3. Be understanding of the borrower’s situation

Understand that your friend may be going through a difficult financial situation and be willing to work out a repayment plan that is fair and manageable for both parties.

4. Get everything in writing

It is important to have a written agreement outlining the terms of the loan. This will provide a clear record of the loan and can help avoid confusion or disagreements.

5. Be prepared for the loan to not be paid back

Lending money to friends carries a level of risk. Be prepared for the possibility that the loan may not be paid back. This doesn’t mean you should stop being friends, but you should be prepared for the possibility.


1. Don’t lend more than you can afford to lose

Lending money to friends can be a risky endeavor. It is important to not lend more than you can afford to lose.

2. Don’t put pressure on your friend to repay the loan:

Lending money should not put unnecessary pressure on friendships. Avoid putting pressure on your friend to repay the loan, as this can cause tension and strain the relationship.

3. Don’t lend money for frivolous expenses

It is important to be mindful of the reason for the loan. Avoid lending money for frivolous expenses such as a vacation or shopping spree.

4. Don’t make assumptions about the loan:

Don’t assume that the loan will be paid back or that interest will be charged. Be sure to have an open conversation about the terms of the loan.

5. Don’t let the loan come between you and your friend

The most important thing to remember is that the loan should not come between you and your friend. If the loan causes strain on the friendship, it may be best to forgive the debt and move on.

In conclusion, lending money to friends can be a tricky situation, but it can also be a great way to help out a friend in need. By following these do’s and don’ts, you can ensure that the loan is handled in a way that is fair and respectful to both parties.

Remember to communicate openly and honestly, be understanding of the borrower’s situation, and don’t let the loan come between you and your friend.

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Written by Mila Joshua Yona

Pro South Sudanese Blogger, Digital Marketer & Web Designer. I help entrepreneurs scale up their businesses online. You can join my Facebook Group Here or Telegram Group Here

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