Need to borrow money from a friend or family? How to approach the subject

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You are strapped for cash, so you are considering applying for a loan from a friend or family member. Whether you need a small amount to get by until payday or a larger amount for a major life event – seed money to start a business , you don’t know how to structure the request.

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There is a common school of thought that mixing loved ones and money just doesn’t work. Of course, not everyone shares this mindset, so be light-hearted to make sure you don’t inadvertently tarnish your relationship with the other person.

Jodi RR Smith, president of Mannersmith Etiquette Consulting, said borrowing money is rarely easy, especially when applying for the loan from friends or family.

“It is not an easy subject to bring up or discuss,” she said. “When you find yourself in need, take some time to strategize before formally asking. “

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She said it’s important to start with a self-assessment, so you can start with a plan. For example, think about why you need the money, whether you will disclose the reason for the loan, the amount you need, and your repayment strategy.

When you have your plan together, Smith said your request should be as professional as possible.

“Let the person know that you have something serious to discuss and schedule a specific time to speak,” she said. “Surprising the person in the middle of a party or a family reunion does not bode well for future confidence. “

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Don’t expect an immediate response, as Smith said most people will need time to review your request. Instead, she said to just ask when they expect to make a decision, thank them for listening, and give them time to think it over.

“If this conversation is confidential, call them back and take the leave,” she said.

It is very possible that your request will be refused as Smith has stated that not everyone is comfortable lending money. She also noted that the person’s financial situation might not really reflect what you are seeing on the surface.

“There are people who present themselves as having a lot, but who are themselves in debt,” she said. “And others who just live with big bank accounts.”

If the person decides not to lend you the money, Smith says they don’t owe you an explanation. However, it is also possible that your loan application will be accepted.

Lisa Grotts, an etiquette expert known as the “Golden Rules Gal,” said a payment plan should always be in place in this situation.

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“Put it in writing with a deadline,” she said. “It would happen in a bank, so a loan from a friend or family member is no different.”

She said it is also important to establish ground rules, so that things don’t go wrong.

“A lot of people are in need of loans in the age of Covid, when so many businesses have been shut down,” Grotts said. “Applications can range from keeping their business afloat to helping with a mortgage payment. “

No matter why you need the loan, she noted that time will be your enemy if you don’t follow the set repayment plan and ignore their demands to keep your end of the bargain.

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“The longer it goes unpaid, the lower the participation rate will be,” she said.

Therefore, it is important to create a repayment plan together that you can realistically adhere to. Do everything you can to be on time with your payments, but be honest if you know you’re going to miss a deadline.

It is better to let the person know in advance that a financial setback will cause a late payment than to make them believe that you are trying not to return their money.

At the end of the day, borrowing money from loved ones can be a tricky subject, so do all you can to lessen the embarrassment. If they decline your request, politely thank them for their time, and if they give you the loan, don’t make them regret doing it.

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Last updated: May 7, 2021

This article originally appeared on Need to borrow money from a friend or family? How to approach the subject

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