How to ask to borrow money

how to ask to borrow money

For those who do not have established savings, an unexpected expense could throw off their entire budget. About 69% of American consumers in urban areas are living paycheck-to-paycheck, meaning that any minor surprise expense could become a financial emergency they can’t afford.1

In situations like these, people will likely need to borrow cash in the form of a loan or put the expense on their credit card. Both these options can cost borrowers a significant amount of money in interest and other loan fees. Asking a friend or family member to lend you money could be a far better option. But it’s important to know how to go about asking to borrow funds in the right way.

When Financial Emergencies Happen

Unfortunately, no one is immune to financial emergencies. Life has a way of never ceasing to surprise us, sometimes in a positive way and sometimes in a not-so-positive way. There is no way of knowing when these little bumps in the road are going to occur. 

You may need a small or large sum up front to deal with the following:

  • A necessary car repair due to an accident.
  • Damage to your home from a storm.
  • A hospital bill from emergency care.
  • A replacement for broken eyeglass frames.
  • Emergency veterinary care.  

In these moments, it is important to have a game plan for how you are going to handle them if you have not been able to save up an emergency fund yet. You could opt to get a loan or borrow from your pension, but if you want to avoid paying interest and other fees, you could save money by asking a friend or family member for help. 

Asking a Friend or Family Member for Help

When you have trouble paying for a necessary or time-sensitive expense, borrowing money from a friend or family member could be a great solution. According to a survey by The MarketPlace, more than 50% of people have borrowed money from friends and family.2 However, just because relying on friends and family might save you money does not necessarily mean that it will be completely stress-free.

Borrowing money from friends and family can come with its own risks that are important to consider before making a decision. Whenever you mix finances into a personal relationship, things can get complicated, so it’s a good idea to be aware of the dynamics at play.

The Dangers

Certain risks that may come with borrowing money from friends and family members have the potential to create tension in the relationship. Probably the biggest danger is miscommunication. Miscommunication between the person lending and the borrower can lead to hurt feelings and resentment. When friends and family can’t afford to start lending money, they might feel awkward having to turn their loved ones down. 

The last thing you likely want to do is make your family member feel bad if they can’t lend you money or if you don’t have clear communication about the borrowed money. It is crucial for you to clearly communicate what you are asking for, which they can agree to only if they are willing and able. After that, it is just as vital to keep the communication up so no one gets their wires crossed. 

The Benefits

There are plenty of benefits that you’ll get when you get a loan from a friend or family member instead of a financial institution. You will likely save a significant amount of money on interest charges in addition to any other fees that come with traditional or online loans

There is no credit check to worry about when you borrow from friends or family, which can be a major bonus for individuals with less-than-perfect credit. Borrowing from a family member or friend allows you more flexibility and say in the repayment terms so you can pay back the money owed in a way that is affordable for you. 

How To Go About Asking To Borrow Money

Once you’ve made the decision to turn to a close friend or family member for financial help, don’t jump into the deep end and ask them right away. Instead, take a step back and come up with a plan for how you want to approach them. How you ask them is incredibly important when you are dealing with something as serious as a loan. 

Here are some tips that could help you figure out a good strategy:

Who Should You Go To?

The first order of business is to determine that you’ve picked the right person to ask. Before asking the first person that comes to mind, consider their personal financial situation and obligations. 

Think carefully about each person you consider asking so you don’t ask someone who couldn’t afford to lend you money in the first place. Additionally, you will want to only ask people who you have a good and relatively close relationship with.

Have a Prepared Plan

Before you go to this person to ask them, have a plan mapped out that you can present to them. This will make it clear that you take their part in the financial exchange seriously. Know how much you will ask for and how you plan to use it. 

Map out your budget for them so they can see how you plan to pay the loan back. This will build trust between you and them because you are coming to them prepared but willing to adjust your plans based on their needs.

Make a Repayment Timeline

Work together to devise a payment plan that works for both of you. If you already came up with a repayment plan in your preparation, show it to them and ask for their input. Explain the monthly payment you will be able to afford and how you still plan to cover your other expenses while you pay back the loan. 

Discussing your payment plan in depth with them will communicate how seriously you take their willingness to help you and how determined you are to repay the loan in a timely manner. 

Suggest an Interest Rate 

To make this financial exchange even more of a win-win situation, we recommend insisting that you pay interest when making a repayment. It does not need to be much to make the loan well worth it to the lender. 

If you pay at least what they would make in interest if they let the money sit in a high-yield savings account, you would essentially be offering yourself as an investment rather than a chore. Most high-yield savings accounts nowadays only pay 1 to 2% interest at most, which is still significantly less than how much interest you’d be required to pay for a more traditional loan.

Write Out an Agreement

The most important thing when borrowing or lending money to a family member or friend is to get everything in writing so there is accountability for both parties. Put down everything you’ve discussed, from ground rules to how you’ll be making payments on paper, and turn it into an elementary loan agreement. By having a loan agreement prepared at the start, neither of you can be caught off guard by changes that you didn’t discuss beforehand.

Keep Communicating

Ideally, everything would go according to the plan for the entirety of the repayment process. However, life happens, and the flexibility that comes with borrowing from friends and family is one of its most significant benefits. While you don’t want to do anything to go against the loan agreement you both wrote, it is important to keep the line of communication open with the person you lent you money if things aren’t going according to plan. 

If you have next to no money in your bank account, discuss personal finance options with your friend or family member to see if you can skip a month or reduce the monthly payment. Communication is the best way to show them that despite life’s difficulties, you are grateful for their help and attempting to pay them back as quickly as possible.

Alternative Options for Borrowing Money

While it would be convenient if everyone had a person in their lives, they could go to for financial help, that is not always possible. For those who don’t have this option for borrowing money, there are still ways for them to get the money they need, even if it might cost more. Which option is right for you depends entirely on your unique financial situation. 

Source of FundsProsCons
Traditional Bank Loans– Potentially lower rates for those with good credit. – Established and regulated institutions. – Can offer larger loan amounts.– Stringent approval criteria. – May require collateral. – Longer processing time.
Personal Loans– Quick approval process, especially with online lenders. – Flexible loan amounts. – No collateral required for unsecured loans.– Potentially higher rates, especially for those with poor credit. – Fees and penalties.
Emergency Fund– No interest or fees.  – Immediate access to funds. – No need for approval or credit checks.– Depletes savings, leaving less cushion for future emergencies. – Takes time and discipline to build up.

Traditional Loans From a Bank or Credit Union

You can seek out a loan from a traditional financial institution like a bank or credit union. If you have a good credit score, you could get a competitive interest rate from a bank. Credit unions can offer excellent deals to their customers, but you must first become a member. Becoming a member of your local credit union could be well worth the trouble for the perks you might be able to get when borrowing money. 

Personal Loans From Online Lenders

There has been a considerable increase in the number of online lenders offering personal loans in recent years, making it easier than ever to get quick funding. There are a wide variety of personal loan options available online – from large loans with lengthy repayment plans to short-term loans offering just enough cash to get you back on your feet. 

You can apply for a personal loan from an online lender with an excellent credit score and find interest rates that compete with bank rates. Conversely, there are bad credit loans online too. It should be noted that the lower your credit score, the higher your interest rates might be. 

Have an Emergency Fund Prepared

To avoid the need to borrow cash in the future, we highly recommend building an emergency fund for all future unexpected expenses. Once you have the cushion of savings to handle surprise medical debt bills or urgent repairs, you won’t need to turn to a friend or family member for financial help, let alone a lender that you would need to pay interest to. 

For those building an emergency fund for the first time, most financial experts suggest starting out with $1,000 in a separate savings account. This is a good amount to cover you in a crisis when you are still working on your overall financial health. But once you are stable and/or your income increases, you can build your emergency fund larger until it can cover expenses for three to six months. With an emergency fund this size, you would be able to manage a job loss or income reduction with far less stress.

Frequently Asked Questions About Borrowing Money

What is the difference between “lend money” and “loan money”?

Both terms essentially mean to provide someone with money temporarily, expecting it to be paid back. “Lend” is the action, while “loan” can refer to the action or the amount given. For example, “I can lend you some money” or “I can give you a loan.”

How can I ensure that lending money doesn’t harm my personal finance?

Before lending money, it’s crucial to assess your own financial situation. Ensure you have enough savings and that lending won’t disrupt your financial goals. It’s always a good idea to consult with a financial advisor.

Is it common to charge interest when friends or family lend money?

While it’s not always common, charging a minimal interest rate can be beneficial for both parties. It can be lower than traditional bank rates but higher than a high-yield savings account, ensuring the lender gets some return on their generosity.

What should be included in a loan contract when borrowing from friends or family?

A loan contract should clearly state the loan amount, interest rate (if any), repayment schedule, any penalties for late payments, and both parties’ signatures. This ensures clarity and reduces potential misunderstandings.

How can I approach someone if I’m unable to stick to the repayment schedule?

Honesty is the best policy. Reach out to the person you owe money to as soon as you foresee an issue. Discuss your current financial situation and propose a new repayment plan that you can manage.

If I’m borrowing more money than initially agreed upon, should I draft a new loan contract?

Yes, it’s essential to update the loan contract to reflect any changes, including borrowing more money. This ensures both parties are on the same page and avoids potential disputes.

How can I prioritize my outstanding debt if I owe money to multiple lenders?

Prioritize outstanding debt based on interest rates, with high-interest debts being paid off first. However, if you’ve borrowed from friends or family, consider their financial situation and the terms of your agreement. Balancing personal relationships with financial obligations can be tricky, so communication is key.

CreditNinja: What You Should Know About Borrowing Money

There are a lot of options to get money in your checking account, but the best way to borrow depends on your financial needs and situation. If you have time to spare, consider learning how to improve your personal finance using our online information blog. You could learn about peer-to-peer lending, increasing your credit rating, working a side hustle, and more!


  1. 69% of Americans in Urban Areas are Living Paycheck to Paycheck │ Cision
  2. Over 50% ‘borrow from friends and family │ The Guardian
  3. 11 Steps: How to Borrow From a Friend or Family Member │ Student Loan Hero5
  4. How To Ask For Money Politely: An Etiquette Guide │ Rocket HQ 
Read More
does apr matter if you pay on time
Does APR matter if you pay on time? That depends on your overall balance. If you completely pay off your balance before your next payment…
loans like upgrade
Upgrade is a financial institution that offers several products, including personal loans, a few types of rewards credit cards, savings and checking accounts, and credit…
loans like boost finance
If you need a cash loan, you should know that there are many personal loan options similar to Boost Finance. People use personal installment loans…
loans like eloan warehouse
If you’re looking for a loan similar to eLoan Warehouse, you may be dealing with an unexpected expense and need emergency cash. According to a…

Quick And Easy Personal Loans Up To $2500*