We aim to make our website as accessible as possible. However if you use a screen reader and require debt advice you may find it easier to phone us instead. Our phone number is 0 8 0 0 1 3 8 1 1 1 1. Freephone (including all mobiles).
StepChange Debt Charity logo
Go

What to do if you owe money to family or friends

Borrowing money from family and friends may be a cheaper and easier alternative to lending money than a doorstep lender or payday loan. However getting into debt with someone close to you can be complicated and difficult if you’re no longer able to afford to repay the debt.

If you’re thinking about borrowing money from a friend, make sure that you’re able to afford the repayments. You should talk about what might happen if you can’t afford to pay it back and whether this would affect your relationship. Sometimes the possible strain on your relationship might not be worth it.

What are my alternatives to borrowing from family or friends?

If you’re worried that borrowing money from someone could cause problems it’s worth considering alternative or cheaper ways of borrowing money. These include:

  • Credit union loans
  • Using an authorised overdraft
  • Loans or help from a local authority welfare assistance scheme
  • A wage advance from your employer
  • A budgeting loan or advance from the DWP if you’re getting benefits

What if I can’t afford to repay the debt?

If you’ve borrowed money from a family member or friend and you can’t afford to pay them back you should first talk to them so they’re aware of your situation. They may be able to offer help by letting you spread your payments out, or give you some time to sort things out.

It can be difficult to talk to someone about this, as there’s a chance you could fall out with a family member or lose a close friend because of the money.

If you can't afford to pay your family member or friend back, don’t ignore them. If you stop seeing them, they may just assume you have no intention of paying them back at all.

Instead, tell them why you can’t afford to pay them back. Be honest. Explain what you have coming in and what essential costs you need to pay. You could even show them a copy of your household budget. That way, they can see why you can’t pay them back faster.

Owe money to family and friends and need help?

Need debt advice?

Free, online debt advice available now

Get debt help

What action could be taken against me?

In many cases you can help resolve the situation by talking through things with your friend or family member and coming to an agreement on how you’ll deal with the debt.

Sometimes things become more difficult and the friend or family member takes further action against you. These types of debts can be pursued through the courts, similar to other unsecured debts. If you’re facing court action of this type you should seek legal advice as this can be complicated.

A friend or family member can legally lend you money, but if someone is making a profit by lending money to you and charging interest they may be acting illegally. This type of lender is known as a loan shark, and they can’t get their money back by taking you to court. Contact us for confidential advice if you have this type of debt. 

I’m owed money by my family or friend! What can I do?

It’s not uncommon to find yourself in difficulty because you’ve lent money to someone who hasn’t paid you back. If this has happened to you, try:

Giving the person a gentle reminder

Employing tact in a situation like this can really help. People with debt problems can often feel overwhelmed. A gentle approach means they’re less likely to avoid you.

Suggesting a payment plan

Paying you off in one go might put your loved one back to square one, which means they need to borrow money again very soon. Putting an affordable payment plan in place means that they can pay the debt back without getting into further difficulty.

Sit down with them and work out how often they’ll pay and how much, making sure it’s affordable for them, so they can stick to the plan. They could even put together a budget, which would help them understand how much they can afford to pay you each month.

Looking for ways to help them with their budget

If your loved one is struggling financially, there are a host of websites and apps that can help them budget. They could look into switching utilities or to a cheaper phone tariff. There's also support available if they're dealing with a financial crisis or emergency. If they need debt advice, let them know that we can help.

There are a few things to avoid if someone owes you money. Don’t:

  • Add extra money or “interest” to the debt that they owe you
  • Tell other people about the debt
  • Lose your temper or use threatening language

These are more likely to make the other person avoid you, and you could even be breaking the law.

I’m in debt but a loved one wants to borrow money from me


If you have debts you’re struggling with, it’s highly unlikely you’re in a position to help your loved one, as much as you may want to. Kindly but firmly tell them  no. Tell them of the alternatives, and suggest they get some free and confidential debt advice.

Help and advice

If you’re borrowing money from other people because you’re struggling to pay for essential living costs, this is a sign that you may have a bigger debt problem. You should get in touch with us for free, expert debt advice.

You can use our confidential online debt advice tool which gives you practical advice and a solution to your debts that's based on your situation. If you'd prefer, call us (free from all mobiles and landlines) to talk to one of our advisors.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

We link to external websites where they contain relevant information for our visitors. We're not responsible for the content of these websites, or any infringement on your data rights under data protection regulations by any external website provider.

*This is the average rating of our service based on the StepChange reviews on Feefo by DMP and DRO clients three months into their solution.

© StepChange Debt Charity 2019