How to Collect Money From a Friend

It happens to the best of friends, the well-intentioned money loan that becomes awkward when he misses a payment or fails to pay in full. Aside from wallowing in anger and frustration and letting it come between your friendship, read on for ways to collect money from a friend.

Instructions

Difficulty: Moderately Easy

1. Approach her in a non-threatening and non-judgmental way. Don't make assumptions. Just because your friend shows up with a new, expensive purchase, don't assume that she has spent the money earmarked for your loan. Instead of accusing her of failing to pay, ask if the two of you can talk. Comment about her purchase, but don't blame her for being thoughtless about her spending. The new item could have been a gift, after all.
2. Be the banker. Draft a promissory note in which there are clear expectations about when the debt will be paid, as well as interest rates and other financial details. When you act serious about collecting money from your friend, he will be more willing to repay you in a timely manner.
3. Have patience. That new purchase might very well mean that your friend has earned the money and is intending to pay off her debt to you. Give her the benefit of the doubt, as well as a little more time.

Tips & Warnings

• Be realistic. Loaning money to a friend is a relationship "no-no." It's best to make the money a gift so as not to have any financial expectations coming between you.
• Instead of a financial loan or gift, see if there may be another way in which you can help your friend. Sometimes volunteering your time or a sympathetic ear is what your friend may really need. Attempting to collect money from a friend is usually detrimental to the friendship.