How to Refuse Lending Money to a Friend

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When a friend asks to borrow money, it puts both of you in a difficult position. This is especially true if you don’t want to lend them money. You don’t want to upset them, but you don’t want to be their personal bank every time they get into a tight financial situation. So if you don’t plan on saying yes, you might be wondering how to refuse lending money to a friend. Read on to find out the best way to do so.

How to Refuse Lending Money to a Friend

It is human nature to want to help out a friend in need, but it can also put a real strain on your friendship. You will need to weigh carefully the possible outcomes if you do decide to lend your friend money.

If your answer ends up being no, here are a few ways you can let them down easily without hurting your friendship.

1. Tell Them You Can’t Afford The Loan

One of the easiest ways to get out of giving money to friends is to just tell them you don’t have it to lend.

If this is the truth, then that’s the end of it.

Even if it isn’t the truth, you can just let your friend know that you have some unexpected expenses at that time, so money is tight for you.

Sure, you might be lying, but it is a small white lie that will be easier for your friend to swallow than just telling them you don’t want to lend them money.

This leads to a second point…

Make it a habit to not share your financial situation with friends or family. They don’t really need to know how much money you have or the fact you have extra.

If you keep your financial information to yourself, your friend might not think to ask you for money in the first place.

Then you won’t find yourself in a position where you might feel pressured to loan money.

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2. You Have a Blanket Rule That You Don’t Lend Money

One way you can let your friend down easily is to tell them you have a blanket rule that you don’t lend money to anyone.

Make this one of your financial habits and you won’t find yourself in an awkward situation later on.

When you don’t lend money to anyone it is no longer personal. You’re not telling your friend that you won’t lend them money, so it isn’t about them any longer.

It is just your policy and you don’t make any exceptions.

Of course, if you go this route, you can’t make any exceptions. If you do your friend will find out and then they will be really upset.

Having this rule and sticking to it, just makes life easier for everyone involved.

Once your friend knows you don’t give money to people for any reason, they may be disappointed but they will get over it and your friendship will not be damaged in the long run.

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3. Tell Them All Financial Decisions Are Made Jointly

If you’re in a relationship, you can tell your friend that all financial decisions are made jointly and your partner doesn’t like you to loan money to friends.

Sure, it kind of stinks putting the blame on your partner, but it does get you off the hook.

Just know that your partner gets to tell their friends the same thing about you.

4. Just Be Polite 

Sometimes, it just comes down to the truth. You’d like to help but you’re uncomfortable lending money to a friend.

Be polite and let them know you’d like to help, but you have found that lending money to friends can hurt the relationship and you care too much about them to get into that situation.

Tell your friend you are sorry, but you just don’t want to go down that road.

Don’t tell them that you don’t trust them or feel they are a bad risk, even if you feel that way.

Put it on you and not them.

Don’t tell them you see all the destructive ways they live their life including the way they waste money.

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5. Tell Them You Don’t Want to Ruin Your Friendship

This is similar to number four on this list. 

It is also most likely the truth.

Lending money to family or friends is the easiest way to ruin a relationship.

You will be tapping your foot waiting for them to pay you back, and your friend will feel pressure every time they see you.

If they don’t pay the money back quickly or at all, the relationship will be truly damaged.

6. Don’t Wait – Tell Them No Right Away

If you don’t plan on loaning your friend any money, do let them know right away. 

If you want to think about it before giving an answer, don’t wait longer than a day.

The worst thing you can do is to leave your friend hanging out in the wind waiting to hear back from you.

Of course, if you already know you plan on saying no, do it immediately when they ask. Don’t put it off. 

It is best they know right away, so they can try to make other financial arrangements.

Don’t string them along.

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7. Offer a Small Amount of Money as a Gift

If your friend is asking for a larger amount of money, offer them a small amount as a gift.

You can tell them you don’t lend money to anyone, but here are a few bucks to help out and just consider it a gift.

Then you don’t have to put the strain of waiting for them to pay you back on your relationship.

If they are asking for a large amount of money – meaning thousands of dollars – then throwing them a hundred bucks might not be the way to go.

It won’t help them out and it might upset them.

On the other hand, if they are asking for a small amount then this gift might be the right idea.

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8. Provide Other Assistance 

After you have told them you won’t lend them money, offer them some other type of assistance if it makes sense.

For example, if they are out of work, help them create a new resume. 

Offer to babysit while they go on job interviews.

Even invite them over for dinner.

Just find ways you can help them that don’t include money. They will appreciate the effort and it will soften the blow.

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9. Treat Them the Way You Would Want to Be Treated

Before you say no, put yourself in their shoes. How would you want to be treated if you were the one needing to borrow money?

Think about that first, and then use it as your guide.

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To Sum it All Up:

Lending money to a friend might seem like a good idea at the time. You want to help them out and be there for them, but oftentimes, in the long run, it ruins the relationship. You can let your friend down easily if you’re careful without causing damage to your friendship.

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