Lending Money To Friends Can Ruin A Friendship. This Is My Story.

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Mr. FAF and I have lent money to our friends a couple of times.

I know it’s not a good idea and can ruin a friendship.

But when someone who has helped us so much is in difficulty, we just can’t say no to them, especially when we know they can pay us back.

All of the friends who borrowed money from us gave it back except for one person.

I’m writing this post not to criticize her or invite judgement, but to share my perspective on how money can change the way we think of someone we thought we knew well.

Our friendship

When I was pregnant with Baby FAF, we had a hard time finding housing because of our then low income.

We were both graduate students at the time and didn’t earn much.

But we had enough savings that could prove that we could sign a lease for a two bedroom apartment in DC for at least a year.

At the same time, I was stuck with the lease for my room in a 3-bedroom townhouse.

The leasing office wouldn’t release me from the lease unless I could find someone who can qualify for the income and have the other two roommates and that person go through the application process at the same time, which sounded like a big hassle to them.

One of the roommates had already moved to another city for a new job and secretly subletting her room to someone else. She didn’t want the leasing office to find out and refused to go through the application process again.

I was stuck.

I was 7 months pregnant at the time. My mother-in-law was coming in 1.5 months. Mr. FAF would spend a month in DC and do his research remotely. The four of us needed a place to stay, and we needed it fast.

At the time, my friend was living in an apartment complex where the leasing office didn’t care so much about checking with the previous landlords and was ok with our savings as proof that we could afford the rent.

She told us about the place and tried to talk the leasing office into renting us a two bedroom. During the time we stayed there, my friend would come by to visit the baby and let us do laundry at her place a couple of times when our washer broke and we would have to wait for two weeks for the new machine to arrive.

I also met her boyfriend and her parents. In fact, when she moved to another city, we got a lot of hand-me-down furniture from her which we still use to this day.

She helped us find housing when no one else would. It was one of the most difficult times in our marriage, and we’re still deeply grateful to her.

Related: The Financial Implications Of Having A Baby While In Grad School

The loan

Late last year, the friend reached out to me for help. She was in the process of buying a fixer-upper but needed the cash to speed up the process and appear more attractive than the other buyers.

She said she needed a couple thousands of dollars and promised to pay us back two weeks after the closing. Mr. FAF and I had some money saved up for emergency, but we were also trying to save more to prepare for Baby FAF’s return from China.

I discussed it with Mr. FAF, and we agreed to lend her $2,000. We trusted that she would return us the money after two weeks as promised and didn’t even ask her to write an agreement or anything like that.

A week after the closing, she told me in despair that her dad was in critical condition, and that she would return the money after two months or so.

Two months later, she messaged me, saying that she would send me the check. We never got the check. And she never mentioned the money again. I also found out that she had also borrowed money from a mutual friend of ours in the thousands.

Over the past year, I have to admit that I was just too shy to ask her about the loan for three reasons.

First, I know she just gave birth and might need the money for the baby. Her husband had a part-time job at the time that didn’t pay particularly well. She was in school as well and didn’t have a full-time job either.

Second, her dad was sick, so I didn’t want to be the insensitive nagging friend that only cared about money.

Lastly, when Mr. FAF and I lent her the money, we both knew that we might never get it back and didn’t want to ruin the friendship over $2,000.

Related: When Money Matters In A Relationship

Is money more important than a friendship?

Asking for the money back

However, as I was scrolling my Facebook Homepage the other day, I saw that they had made an expensive purchase for travel. Part of me was not happy. They have the money to travel but not to return to us what they borrowed?

From being surprised, I got upset. I wasn’t policing their lives. But it seemed to me that they had the money and intentionally forgot to return our money back to us.

I decided to contact our mutual friend to see if my friend had returned her the loan. The answer was no, but she did promise to return the mutual friend money on a certain date.

Here I was feeling neglected and betrayed. The mutual friend told me not to feel bad, and that I should separate money and emotions and ask her about the loan. I contacted the friend. Below were the excuses she presented for not having returned us the money:

— “Last time I asked you for your address, but you didn’t send it to me, so I also forgot about the money.” This is totally not true since I have the chat history to show that I did send her my address. Plus, would it hurt to ask a second time? No.

— “I actually went to the bank to wire you the money, but they would charge me $50 or so, so I decided not to do it.” This infuriated me. There are so many other ways to return the loan without incurring such a fee. I transferred the money straight to her bank account without having to pay a dime. Plus, deciding not to return someone their $2,000 over a $50 sounded preposterous to me.

— “I always meant to return it to you. But there’s so much going on that I totally forgot about it. I actually have the money sitting in my bank account.” This excuse upset me the most. She had the money but didn’t “remember” to return $2,000? It bothers me even when I owe someone $10, and I rarely ever borrow money from anyone.

After I contacted her, she said that she would send me a check right away just like the last time she promised me. Part of me was relieved, but part of me was still cynical.

I wouldn’t believe her until I could see the check in our mail. I patiently waited and still carried a normal conversation with her during that time.

We would remain friends with her and her husband if she returned us the money as promised. But we would never lend them money again. And worst yet, I will never look at her the same way again. She will still be my friend, but not the one I used to trust.


Would we lend her the money if we had known it would drag on for more than a year? I don’t think so. Even if we did, I would lend her much less than $2,000.

What I found the most frustrating about this incident is that our friend, the one we trusted so much, didn’t keep her promise. Her action made me wonder if she was hoping we would also forget about the money or if we didn’t matter enough for her to remember.

In the end, we got the money back after a week after I sent her an urgent message telling her that I needed the money right away.

We wired her the money one day after she asked us but had to wait for more than a year to get it back. It just seemed so unreal to me. Sometimes truth is stranger than fiction for sure.


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24 thoughts on “Lending Money To Friends Can Ruin A Friendship. This Is My Story.”

  • Yeesh! That is just tough! I’m all about helping people, and in your shoes, maybe i would have done the same thing and lent her the money… It just sucks when people ruin trust and friendships by not doing the right thing and paying back.

    My simple rule of thumb when it comes to loaning money to friends or family is, if i’m not willing to lose that money, the answer is no, i don’t have it!

    Unless it’s a life or death situation. Because i don’t want that type of tension between me and loved ones.

    • “My simple rule of thumb when it comes to loaning money to friends or family is, if i’m not willing to lose that money, the answer is no, i don’t have it!”

      I really like this rule too. I was ready to get go of the $2,000 since I thought my friend was in financial difficulty. But after learning that she could pay be back, I thought I’d reach out to her to see what she’d say. I’m glad we got the money back 🙂

  • Fortunately we’ve never had a friend ask us to loan them any substantial amount of money. And yeah, if we ever do loan money hopefully we’ll do it with the understanding we will likely not get the money back. We did recently offer our guest room up to a friend for free who just separated from a 12 year relationship and has been staying in his mom’s one bedroom apartment. He declined, but I know we would prefer to loan favors and things instead of money.

    • It was very nice of you to offer the guest room for free since I know it could be rented out for a nice sum of money. Money is a sensitive topic, so offering favors in other ways is definitely a great way to help our friends too 😀

    • It happened to me years ago.

      A friend of mine that I have known since high school and at one point became one of my roommates when I moved to the big city for work texted me one day. The text message goes like this:

      ” I am scheduled to give birth soon and unfortunately I don’t have enough budget. Can I borrow 20,000 from you? I will pay you back after 3 months. Here is my bank account details where you can deposit the money.

      I feel sorry for her and since I have known her for a long time, I deposited the 20K.

      After more than 3 months, I did not get any message or payment from her. I find it embarrassing to ask so I waited a bit more. Then when I sent a “Hi how are you?” message, She said that “I am fine. Today is the baptismal of my baby boy.”
      Surprised that she threw away a baptismal party but has not paid me yet.

      I waited for like 6 months before I mentioned to her the overdue loan. She gave me excuses like they cannot sell the pigs yet, etc.

      It took more than a year and in the end she was ANGRY at me. She told me that with all the stress that I am giving her (apparently), it will be justifiable not to give the money back.

      She paid it in the end but we never talked after.

  • I knew everyone had at least one of these stories! At least mine was only $20. $2000 holy smokes! You two are so generous. It’s a good policy when giving money away to know there’s a chance you’ll never see it again. I think you’re being so mature and understanding!

    • Thank you, Lily! it was indeed A LOT of money for us back then and even now. But since our friend was desperately in need of cash and had helped us a lot, we thought we could trust her with our savings. But now we know 🙂

  • Money and friendships never mix. It always ends horribly and friendships are often destroyed over money.
    No good could ever come out of it. I’ve been there done that and will never put myself in that position again.

    • Yup Mr. FAF and I are having second thoughts about lending friends money after that incident. It stinks when our trust is broken 🙁

    • That’s a decent chunk of money. I’m sorry to hear that it didn’t go well. We all learn about money and friendship one way or the other. Mr. FAF and I just did, so we’re adjusting our expectations and favors as well. 🙂

  • Once something has been broken, it’s never the same again.

    I would do the same as you; people say I’m very fierce when it comes to friendships, which is definitely true, but potentially detrimental. I’m definitely very lucky having loaned about 15 in total, and getting all of it back.

    I think the sentiments you expressed are why the fall outs happen. Especially the part where it you made you think that “you did not matter to her”, that too would play very heavily on my mind.

  • My traditional chinese stole $10k from my bank account that they had access to. In their eyes it was a “loan,” but they have never discussed giving that money back. I’ve been scarred so deeply that despite how dire someone’s situation is, I will never lend them money. I’m glad you got your loan back though – that is something to celebrate!

  • I don’t recall ever lending anyone money but we have borrowed huge amounts from friends and family. They have trusted us tremendously to loan us a total of $84,000 which we are still paying back. But friends or family, I would always write up some kind of agreement in regards to the interest we would pay them and the date we plan to pay everything back. Even though they trusted us and said no agreement is needed, I believe an agreement is necessary to avoid any tension and not have to keep the other person wondering when you’re going to pay them back.

  • Wow everyone here is pretty lucky with getting repaid. I’ve loaned money probably over 20 times and have never been paid back except once. The one time I was paid back was for $7,000 by my own sister, and it took over two years for her to pay me back. The weird thing is she is a nephrologist and her husband is a gastroenterologist, I wouldn’t have guessed it would have taken over two years for them to come up with $7,000. I’ve lost several times that amount in loans that were never repaid. People that repay loans tend to never need a personal loan from a friend or relative. I’ve never borrowed a dollar from anyone and I grew up an orphan.

  • Yes, it is really true! When it comes to money matters people become so aggressive and does not care what words they come out in their mouth. That’s why the friendships could be compromised.

  • I lent a friend 5k once to help them get out of debt. I was beginning to get on track and wanted to see them have similar success. I wrote up terms and we agreed on payments. I got every penny back, but the whole time I found myself analyzing their expenses. I created anxiety for myself stressing over if I’d get the money back. We’re even better friends to this day, but I decided never again. If a bank won’t lend to them, then why should I? My rule is that I will help any friend anyway I can: store their stuff, live for free, feed them. But lending them money is not something I do anymore. Glad you eventually got your money back.

  • I gave a family member 3500$ (a little more than that but i cant remember the rest). We talked about it once and it ended with her screaming at me. It was 3 years ago I lost my job and thank God i still had some savings.It still pissed me off beacause it took me a while to find work again and I had no more savings after that. Lets say that I had other plans for that money (school). Well I dont plan on asking her again but tto her defense she had a couple of events that were financially draining.

  • I think it depends on the amount relative to your net worth. Iv’e had good and bad experiences in loaning money to friends. I loaned $13k to a very good friend (for his business). We did a contract and it did involve interest. He paid on time every month for 3 years then ended up paying it off in full. I have another friend I loaned $1000 so he could buy a used car then another $2000 so he could re-fi his mortgage. No contract since the amounts were so small. He only paid $400 back on the car loan then needed more time due to hard times. He has not yet paid any back on the $2k (refi) and it’s been 9 months as he was unable to re-fi due to credit score issue. He did just mail me $100 payment so there is effort. He just advised he plans to pay me back in full within a couple months as his re-fi has been approved. My advice – use your judgement based on the credibility of the friend and the amount at risk. I would not just rule out loaning money to a friend or family lock stock and barrel.

  • That is an unfortunate situation. Money and Friendships don’t get along too well. More often than not I have had bad experience with lending money, normally in the $100’s. What I do now is offer to help friends with their finances and make a plan. Often there are ways in which they can save money that they haven’t thought of or are unwilling to sacrifice until you come along and give them support to do so. I would rather spend time to help them. Method doesn’t work in all situations thought.

  • I lent my boyfriend (at the time) money, each time stating it was a loan & he’d agree. He came into money and was surprised when my reply was ‘ good you can pay back all of those loans’ and gave him an excel sheet summing it all up. I was surprised at the total and was careful to not loan him that much going forward.
    He wasn’t good with money, and I definitely am better off since we broke up.

  • Thanks for sharing! I never had the experience of needing to lend from someone but I can imagine what it was going to be like if I were in your shoes. $2000 is not a huge some but it is still significant nonetheless. To conveniently forget about returning it does put some strain in the relationship. I guess in a way you will definitely view this friendship in a different light.

  • Thank you for sharing your story.
    Like you, mixing friendships and money makes me a tad uncomfortable, and I would be even more uncomfortable in a situation that a friend who has helped me in my time of need asks to borrow money – because it will likely result in a lose-lose situation but I just wouldn’t be able to refuse the offer.

  • I’m so glad I came across this article. Today I agreed to loan a friend $40K. We plan on having an agreement and I’m charging her 6% interest over 5 years, but who has a good spreadsheet to track interest if she makes lump sum payments every once in a while?? And should I have some collateral on this amount of money? I’m sure intentions are good, but this is a lot of money.

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