Relatives borrow money online or from each other because it is cheaper and affordable. borrowing from relatives is often preferred since it involves fewer procedures and requirements. Unlike banks and other lenders, relatives do not ask for a credit score report. Neither do they demand security for money lent. Isn’t that amazing? Some cases of relatives giving money to each other do not end up well. Money is a very delicate matter. It ruins relationships and destroys trust. But is that a reason to deny your relative a loan? What if they need it and they’ve never failed at repaying loans? This scenario begs the question, what do you do when a relative ask to borrow money?

Do not say yes or no immediately

The first thing to do is pause and promise to get back to the relative requesting a loan soon. The purpose of doing this is to allow yourself time to consult and do enough background checks. Consultation is essential for you to find enough information to make informed decisions.

There is no need to hurry. Making haste decisions may make you promise to give out a loan. A promise you may fail to keep. Another scenario is you may give out credit to an untrustworthy family member. In the end, they may fail to pay. The consequence will be a ruined relationship. Why allow that when you could take your time and make the right choice?

Employ financial guidelines on lending

The fact that the borrower and lender are relatives does not change the fact that money is money. Cash is a critical subject and has to be cautiously approached. That is why you need to follow the same path a lender like Advance Planners Credit would before issuing a loan to a borrower.

In this case, you will not go to check your relative’s credit score. Instead, you have other family members to ask details of the family member who asked to borrow money. Find out from the rest of the family members how the borrower behaves with cash.

99% of other relatives will give you the exact behavior of the borrower when it comes to a loan. A wise man will listen. If most of the relatives tell you he/she is untrustworthy, then do not risk lending money to him/her. Even after making that decision, do not inform the relative yet. Assure him/her you will contact them once you’ve concluded. Be as courteous as possible.

Another important to look out for is the borrower’s ability to pay back the loan. You will be able to gauge his/her ability to repay the loan after finding out how much he/she makes. This information is readily available among other relatives.

Be tactful

The best way to keep conflicts separate from money is by keeping it formal. Formality will be your way to buy time as you consult. Tell him/her you need to consult with your partner before making a final decision.

Tactfulness also involves making the process formal even if the relative is faithful enough to be trusted with money. Let the borrower understand you did not give them money just because they are relatives but because they are worth your trust and can repay.

What do you do when you establish the borrower does not pay back his/her debts? Promptly, decline the borrower’s request. Of course, they will curse you for rejecting their request but do not be bothered. What should you do in such a situation?

Offer your assistance in other ways. Make it clear to them you won’t loan them, but you will help in all different ways possible. In fact, avoid discussing financial issues with them again. Be firm and let your relatives know you do not lend money to family members.

You may go ahead and explain why. Your relative should know you mind your relationship. In the future he/she will think twice before asking for a loan.

Yes! Have the loan

Some relatives have the highest levels of integrity. Furthermore, they have a high income making them able to repay a loan. When you have proven beyond a reasonable doubt the relative can be given money, you may say yes.

Well, after giving out a loan, sometimes temptations come to play. The trusted relative may as well decide not to pay the loan. What will you do? You have two options. One is to use force and ruin your relationship altogether.

The other option is letting it go to save your relationship. But why let it get there while you could prevent that. Here’s what you should do to avoid getting into trouble with your relatives.

1. Do a written agreement

If put in writing, the borrower is left with no otherwise than to pay back the money. Failure to do so will land him/her in trouble. A written agreement will compel the borrowing relative to fulfil his/her promise to repay the loan.

Although a written agreement will complicate matters more, your relative will perceive it as a lack of trust. Going forward, your relationship may weaken. The good news is you will not get to the point of arguments because one party is failing to keep their word.

2. Involve a witness

Having another relative to serve as a witness will help a lot. Relationships tend to break once the money is involved. With a witness around, the borrower will have no other choice than to repay the loan. The ties will also remain intact.

3. Give a lesser amount of money

If you choose to give money to your relative, then provide a lower amount than the value he/she asked. This way, he/she will have a lesser burden when it comes to repayment.


Money ruins relationships. That is why you can risk giving money to a relative. Although some family members have no problem borrowing and repaying on time. In fact, some will have no problem paying interest. All you need is to be cautious and conscious not to ruin your relationship.