What Can You Do If Someone Wants to Borrow Money From You?

Most of the time, we respond poorly to specific challenges in life if we are unprepared. Lending money is one of those many challenges, and if we have not thought through it carefully, we may be taken for a ride, especially if the borrower is dishonest.

When I mention someone, it can be anyone, a relative, a colleague or an acquaintance.

There may be instances where the borrowing is needful and genuine, whereas there may be instances where the borrowing is like a scam trying to deceive you.

First and foremost, if you know the person well, you can discern whether the borrowing is genuine or needful. However, in many instances, we may be unable to verify the facts due to time pressure.

Hence, to guide us in our thought processes, I have composed some ideas that may be helpful.

I. Assess if the borrowing is genuine

Assessing the need is the first step before opening your wallet. Don't commit to lending the money if anyone comes to you with a sob story.

Speak to a few people who know you and preferably who know both of you. Their opinions may illuminate the situation and give you a clearer perspective.

Sometimes, you may want to pool together to help instead of taking on the risk alone. Remember, unity is always a strength, and lending money is no exception.

If you discern that the borrower is trying a scam on you, do not respond. You can ridiculously talk about your need for cash and walk away from them.

2. Consider alternative ways to help

If the borrowing is genuine because of some cash flow issues, you can also help them find a loan from a financial institution. This step takes more time than simply agreeing to lend money.

It shows the borrower that you care. Of course, you have to be firm and not let the borrower talk you into lending, which is obviously not the way to go.

Along with helping them find the right loan, you can advise them on budgeting their monthly expenses so they will not need to borrow.

Of course, in most instances, the borrower may be more keen to get cash from people they know. Although it may seem helpful, it is still up to the borrower to choose if they want your help.

Do not lend without thinking of not helping as a short solution to their problem.

3. Be prepared to risk not having your money back

When we lend out money, we must have the ability to accept that that money may be gone forever. Don't believe the borrower can return your money in one or two years. They may have considered borrowing from a bank if they can return your money quickly.

Hence I have cautioned that when you lend, do not expect to get your money back. Therefore, you must assess if you can take the loss fully and responsibly without affecting your plans for yourself or your family.

Special considerations

I like to highlight that some people get into debt because of wrong lifestyle decisions that have brought them into trouble. Hence, if you wish to help, you must discuss your financial circumstances with the people who know you.

Helping someone who went into debt because of a wrong lifestyle decision is not helping them change for the better. For example, if one went into debt because of gambling, drinking, poor investing using margins, etc. There are many more possibilities, to name only a few.

The phrase "a leopard never changes its spots" means that one can't change their character, even if they will try very hard. The expression, sometimes also used as "a leopard can't change its spots, " explains that no one can change their innate nature.

Hence, when a person does the wrong action and could escape easily without going through some punishments for their behaviour, they may not be able to learn a vital lesson.

Once the problem is solved, they may repeat the mistake another time.

In summary

We all need to be careful with finances and not risk some money we cannot afford to lose. However, in reality, humans take risks and stories of borrowing money may repeat themselves repeatedly.

Do take care of yourself and help only when you can help, and we must be aware that we may get no money back when we lend somebody money.

Otherwise, seek counsel and help collectively to reduce your risk of losing your hard-earned money.