Updated 4 February 2026

Borrowing money from family or friends

If you need to borrow money, turning to someone you know and care about can feel like the easiest and most comfortable option.

And a friend or family member might be only too happy to tell you if you’re struggling financially.

But mixing money and relationships can be tricky, so it’s important that you take steps to avoid any fallouts or misunderstandings.

Is borrowing from a loved one a good idea?

Borrowing from family or friends can often be cheaper than getting money from a bank or a payday lender.

But it’s still fraught with risks, not least the strain it can put on your relationship.

So although it might seem a good idea on paper, it’s worth looking at the bigger picture, and thinking carefully before you borrow.

If you decide that borrowing from a friend or relative is your best option, it’s also important to think of details like:

how much you’ll repay
how often you’ll make repayments
if interest will be charged

Once these details have been confirmed, put everything in writing.

It might feel formal, but getting your agreement written down means everyone knows what’s expected of them.

This only needs to be a quick written note, or even a message you both save.

Whatever form it takes, it’s something that can help avoid confusion and misunderstandings later on.

How do I work out if I can afford to borrow from them?

Before agreeing to borrow money, you need to work out how much you can afford to repay.

You can do that by creating a budget and working out what money you have coming in each month and where it’s going.

Once you’ve calculated what you’re spending on essential bills like housing, food and utility bills, you can see how much you’ve got left to put towards repayments.

But make sure you only borrow if you’re confident you can pay them back without missing essential bills.

What if I can’t make a payment later on?

If you don’t think you can make a payment, let the person who lent you the money know straight away.

Even if it’s just one payment you’re not sure about, it’s important to tell them early.

After all, it’s best to have an honest conversation than cause unnecessary worry and uncertainty - both for you and them.

Are there alternatives to borrowing from family?

If you’re on a low income or have a poor credit rating, you may feel like you have no option but to borrow from a friend or family member.

But there are alternatives.

For example:

Credit unions offer manageable credit and will consider applications from people with a poor credit history.
Make sure you’re claiming all the government benefits you’re entitled to
Your employer may be able to offer short-term help, such as an advance on your wages. Talk to the HR department.

It’s also worth speaking to a debt adviser, who can offer practical, confidential advice and let you know what other options are available.

I’ve been asked to lend money to a loved one - what should I do?

If a friend or family member has asked if you can lend them money, firstly check your own finances.

Could you comfortably manage if the money wasn’t repaid?

What would you do if a repayment wasn’t made on time?

And how would a late payment affect your relationship?

If you’re not comfortable or feel you can’t afford it, it’s okay to say no.

And you can still be there to support them emotionally or help them look at other options.

How can I protect myself if I do decide to lend?

Even if it’s an informal agreement or only a small amount, it’s still worth putting the details in writing, just as you would if you were the one borrowing.

The last thing you want is to fall out over money, so having a clear agreement written down makes things easier for everyone.

You should also keep records of each repayment and agree what will happen if payments are late or circumstances change.