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How to say NO when friends & family ask for loans

2 December 2022
3 minute read
Happy group of diverse women

Saying no to a friend or family member who wants to borrow money isn’t always easy. You love them dearly and would do anything you can to help and support them, but for the health of your finances and your relationship, sometimes you have to turn them down.  Here’s how to say no to loan requests and remain friends!

Say no in advance

Announce your policy and intentions before you are asked for a loan. Let your family and friends know that you have a policy of not lending money, but are willing to help in other ways where you can.

Top tip: The start of a new year is a great time for this announcement! You can explain how you have looked at your finances for the year ahead and won’t be in a position to lend money.


When you say no, briefly explain why. This can be as simple as “I have a policy not to lend to family and friends to keep our relationship strong,” or “I cannot afford to lend the money as I need to prioritise my children’s needs.”

Be careful of leaving the door open when you give your reason for saying no. If you say “not right now!”, for example, persistent friends and relatives will look for ways to refute your reasons, or ask “when will you have more money?”


Be consistent and don’t break your own rules! Your immediate family, spouse or partner and children, need to be consistent as well.

Be prepared for some fallout

However nicely you say no and - explain that you value the relationship  - there may well be some hard feelings. Expect this - no one likes being rejected. If your relationship is strong, the hard feelings shouldn’t last forever. But your relationship may need a time-out. Be prepared to take the first step after a few weeks to contact your friend or family member and reconnect.

Give up the guilt

You may feel guilty because you can’t help out and the family member asking for the loan may well want to make you feel guilty enough so that you capitulate and loan the money! Don’t worry if you feel some guilt, but if it is overwhelming or lasts for a long time do find a relative or counsellor to chat to.

Top tip: If you have the money and choose to lend it, be sure to set ground rules for the loan such as drawing up a legal agreement on when and how the loan is to be repaid and what happens if it isn’t.

Offer to help in other ways

You can also find ways to help without giving a loan:

  • Work together on a budget
  • Help your loved one complete a loan application
  • Suggest and investigate ways to earn extra money
  • Find ways your friend or family member can save money, from cutting small costs to big ones such as downsizing or moving in with family and friends
  • Help out with other costs, such as buying extra groceries or paying school fees for a term
  • Suggest that they work for you to earn the cash if you have suitable tasks and chores that they can help with

You can also suggest friends and family members learn how to manage money well by taking a financial education course such as the one from Truth About Money.

Let your family and friends know that saying no isn’t turning your back on them, you will still help in many other ways. But the lending of cold, hard cash is off the table!

Your relationship is forever

Money can be a relationship breaker but It doesn’t have to be! Encourage yourself and all your family members to manage their money responsibly and you’ll reduce the need for loans and strengthen the resolve to say no when you need to!

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