Friend Wants To Borrow Money? How To Say ‘No’

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It’s pretty much always awkward when a friend or family member asks to borrow money. The last thing you want is to offend the other person, but in some cases, you’re absolutely not going to give them any money. Unfortunately, you might be feeling uneasy, because you don’t quite know how to handle the situation.

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Tami Claytor, owner of Always Appropriate: Image & Etiquette Consulting, based in New York City, said while there are exceptions, most people who ask to borrow money do so with a sense of hesitancy.

“The unfortunate circumstance is that borrowing money is uncomfortable for both parties,” she said. “Most likely, the person who is asking is reluctant and embarrassed to do so, because money is tied to our self-worth.”

If you are unable to lend the money but wish you could, Claytor said to show empathy to the other person and acknowledge the difficult situation they’re in.

“Next, offer an apology that you wish you could help him or her but unfortunately at this time you can’t,” she said. “Then follow up with the reason why you can’t help. Finally, wish the person good luck.”

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If you’re simply unwilling to lend the cash, Claytor said it’s OK to just be totally honest.

“Tell the person that you have a policy of not lending money to friends and family because you don’t want any uncomfortable feelings between the two of you,” she said.

Or, if the person borrowed money from you in the past and didn’t return it, Claytor said it’s fine to gently refresh their memory, without being rude and obnoxious.

“You could say that you would hate for that person to be in further debt to you,” she said.

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Regardless of your approach, Claytor said not to ask the person why they need a loan.

“You don’t want to add to their embarrassment,” she said. “Most likely he or she will volunteer the information.”

Ultimately, Claytor said it’s important to just be kind to the other person.

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“At the end of the day, proper etiquette is not making someone feel badly,” she said. “So, whatever you say, remember to be kind and gentle to the person who is seeking the money.”

She said adhering to that philosophy will likely allow your refusal to loan the money to be better received.

Jodi R.R. Smith, president of Mannersmith Etiquette Consulting, based in Marblehead, Massachusetts, said to remember this is your money someone else is asking to borrow.

“You are not obligated to provide an explanation as to why you are not giving it away,” she said. “Keep it simple, ‘I know this is a tough time and I am so sorry I am unable to help.'”

This, of course, can be more complicated if the person asking is someone you truly care for, but if you don’t have the extra funds or simply prefer not to lend the money, Smith said it’s fine to politely decline.

“If you are able to ease the ‘no’ response, you can offer to work with them on their monthly budget to provide them a path forward,” she said. “Or, if they are unemployed or underemployed, you can offer some job leads or networking.”

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Ultimately, you have nothing to feel bad about in this situation. You work hard for your money, so you should never feel obligated to dole out loans to friends and family — especially if you’re not sure they’ll pay you back.

If the other person makes you feel guilty for not giving them a loan, that’s a character flaw on their part. No matter how close your relationship is, you’re not their personal bank.

Stand your ground and be proud of yourself for making the decision that’s best for you. At the end of the day, you just have to follow your instincts.

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About the Author

Jennifer Taylor is a West Coast-based freelance writer with more than a decade of experience writing about anything and everything. Since earning her MBA, personal finance has been her favorite topic, as she’s passionate about writing stories that educate, inform and empower. Specifically, she specializes in budgeting, debt repayment, savings and retirement.
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