How To Ask To Borrow Money - Follow These 6 Steps!

Asking for money from someone you have a personal relationship with is never easy, but sometimes it’s the best option if you need quick cash.

However, getting a loan from a friend or family member often requires a different approach than going through a traditional lender. And you want to ensure you have your bases covered to avoid any awkward conversations or conflicts with your friends and family. So, let's explore your options!

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How To Ask Friends & Family For Money

Table of Contents

1. Determine Your Financial Needs

Before you ask for help with money, the first step is to review your financial needs and determine exactly how much money you need. Ideally, this amount is based on a specific need such as a car repair, next month’s rent, or a hospital bill.

This step is important because you don't want to borrow way more or less than you need. And for small amounts, using a cash advance app or asking for a quick cash spot from your friends might not be a huge deal. It's really for larger sums of money where you have to be very specific and careful.

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2. Consider Your Relationship

Not everyone in your life will be a good candidate to borrow money from, and you should consider your relationship before asking.

First, ask yourself if you’re comfortable asking this person for money. This usually means you have a solid, long-term relationship with them. This could be a close friend or immediate family member, but probably shouldn’t include acquaintances or someone you haven’t known very long.

Second, only ask someone for money who you know has enough wiggle room in their own finances. For instance, you shouldn’t ask to borrow money from someone on a fixed income, who also has trouble managing their finances, or someone that you’ve previously borrowed money from and haven't paid back in full.

Lastly, think about the amount of money you need and how it would affect your relationship if you weren't able to pay it back. There’s a big difference between asking for $100 to make your car payment and $5,000 to cover an emergency medical bill.

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3. Ask For Help & Explain Your Position

After you determine the amount of money you need and the person you’ll ask, the best approach is to ask politely and directly. Be as specific as possible in explaining your situation, the amount you need, and your plan to pay it back in a timely manner.

For example, you might explain that you were in a car accident and the repairs cost $800. You plan to pay them back in four installment payments of $200 every two weeks plus interest.

After you’ve explained your situation and asked to borrow money, give them time to think about it and answer any questions they may have. Don’t pester them about getting back to you with an immediate answer. Instead, give them the deadline for when you need the money so that they have a clear timeline in mind.

4. Create A Loan Agreement & Repayment Plan

Never ask for money without having a clear idea of how to pay it back. You need to put the loan amount and repayment plan in writing. If it’s a smaller amount of money, this can be written out on paper or sent in an email. However, if you’re borrowing several thousand dollars, your lender may feel more comfortable enlisting the help of a legal professional or having the document signed by a notary.

The document should include the loan amount, any interest that’s being paid, the repayment terms, what the money is being used for, and the plan if you fail to pay it back or miss a payment. There’s no one-size-fits all template for this—the important thing is that both you and your lender are on the same page.

This is especially important if you're borrowing money from friends or family. Even though you're close, you don't want potential financial issues to mess up your relationship. Treat everything as if you're borrowing from a bank or professional lender to avoid any confusion.

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5. Accept No For An Answer

When borrowing money from family or friends, you have to be prepared to accept “no” as an answer.

People don't owe you money. Plus, someone might have financial needs of your own, so they aren't able or willing to lend out extra cash. In this case, sincerely thank them for taking the time to think about it and move on to your next option.

6. Repay The Money You Borrowed

This last step should go without saying, but you should always repay the money you borrowed on time and according to the agreement you laid out. Just because the money is coming from someone you know instead of a bank doesn’t mean that you don’t have to take it seriously.

If you agreed to pay interest, make sure you follow through as well. Again: all of these details should be spelled out in the agreement you create and sign.

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What Should You Do If You Can’t Repay Your Loan?

Unfortunately, there will be times when you aren’t able to repay your loan due to unforeseen circumstances. Hopefully, your friend has already considered this possibility, and chooses to lend you the money knowing there’s a chance they won't be paid on time.

That said, you need to take steps to make things right.

Start out by sincerely apologizing for the delay. Don't make excuses. Instead, give them a concrete plan for how you plan on making things right and repaying the money you borrowed.

You can also offer them something that shows your appreciation—such as an item of value you own or a donation of your time to help them with a project. But the main goal here is to get your repayments back on track. Even if you pay them back in smaller chunks than originally agreed upon, it's important you honor your word.

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What Are Some Alternatives To Borrowing Money From Family & Friends?

If you’re uncomfortable asking for money from a friend or family member, there are alternatives you can explore that can help you get the cash quickly. These include:

Cash Advance Apps: There are several cash advance apps like EarnIn, Dave, and Cleo that don’t charge interest or require a credit check. Instead, these apps connect to your bank account to determine how much you're eligible to borrow.
Personal Loans: You may be able to qualify for a personal loan through your bank or credit union instead of borrowing money from friends or family. For example, companies like Upgrade let you borrow up to $50,000 and accept a variety of credit types.
Credit Card Advance: Many credit cards let you take out an advance based on your credit limit, but these often come with steep fees and contribute to your total credit card balance.
Sell Stuff You Don't Need: If you only need a couple hundred bucks, you may be able to find stuff around your house that you can sell or pawn instead of borrowing money.
Start A Side Hustle: Consider picking up an extra shift at work or starting a new side job that lets you earn a few extra bucks in your free time. Our list of the best side hustles has over 75 ideas for you to choose from!
Look For Missing Money: You can use a powerful tool like BeenVerified to see if you're currently owed money and don't know about it.

The point is, it's important to consider all of your options before asking friends and family for money. And you can also combine a few of these ideas or consult our side hustle database for even more options.

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Final Thoughts

There’s no right or wrong way to ask to borrow money from a friend or family member, and even when you’re prepared for it, it can still be a difficult and uncomfortable conversation. That said, there are steps you can take to make it a slightly less onerous task and help you get you the money you need without damaging your relationship with the lender.

Hopefully, this checklist lets you borrow money without hitting and roadblocks or unpleasant conversations.

Best of luck!

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