Financially savvy people only lend friends and family members as much money as they can afford to lose, but that doesn’t mean they don’t expect to have the loan repaid promptly. Unfortunately, not everyone is considerate about repaying informal loans, and many well-meaning lenders find themselves in uncomfortable positions as a result. Frustrated informal lenders can read on to find out about five polite ways to remind someone that they owe money without jeopardizing the relationship.
1. Offer a Polite Reminder
Sometimes, people just forget they owe their friends or family members money, so don’t assume everyone who neglects to pay up has nefarious intentions. When this is the case, a polite reminder and a carefully worded question about the borrower’s intentions regarding paying off the debt may be all it takes to get the money back. Just make sure to keep things civil and avoid threats about Debt Collection Agencies, no matter how tempting they may be.
2. Ask for Updates
When someone borrows money for a specific purpose, he or she will usually be happy to let the lender know how the plans are going. If, for example, a younger family member borrows money to purchase school textbooks, the lender can ask how the courses are going. This approach is a little passive-aggressive, but it can prompt borrowers to remember their debts and open up healthy conversations about when they’ll be able to pay the money back.
3. Ask Friends to Cover the Tab
If a friend has borrowed a small amount of money, say to cover a tab at a local restaurant or bar, it may be more appropriate to ask for repayment in kind. Next time both parties are gathered for a meal or drinks, the lender can ask if the debtor wants to cover the tab instead of paying back the money. If the two bills are roughly the same, this can be a great way for lenders to get what they are owed without starting unpleasant conversations with their friends about
repaying debts.
4. Ask for Help
People tend to respond more positively to being asked for help than they do to demands for debt that’s owed. Try proposing paying off the debt in terms of a chance to return a favor. If lenders are more worried about the principle than the actual money, they could even consider asking for a non-monetary favor in lieu of repaying the debt. Well-meaning and magnanimous lenders just need to make sure not to propose this solution in a condescending way, especially
if there’s a huge discrepancy between the two parties’ financial situations.
5. Offer Flexible Terms
If money is still tight for the borrower, offering to let him or her repay the debt in installments might help both parties. If the borrower follows through, it will offer more flexible payment terms
that doesn’t create additional financial hardship while simultaneously giving the lender a stable timeline for when the debt will be repaid.
Stay Calm But Be Assertive
Unpaid debts between family members or friends can create strained relationships, but getting angry about the situation won’t help. If the lender’s relationship with the debtor is more important than the money owed, it may be worth considering one of the alternative payback methods described above. Otherwise, keep offering calm, polite reminders, but be assertive and make sure the person knows he or she is still on the hook for repaying the debt.