I intend on getting it back plus interest. What is a reasonable in terms of interest and what’s the best way to go about doing the deal? He offered to put it in writing that he would return the money within 4 years.
Loaning a friend $25,000 feels like an act of kindness—a way to step up for someone you care about in their time of need. But before you commit, it’s worth considering how this decision could change your relationship. Because it will.
When money enters a friendship, even with the best intentions, the dynamics shift. You’re no longer just friends; you’re a lender, and they’re a borrower. That kind of change can bring tension and unease, no matter how much trust exists between you.
Think about this: What happens if your friend struggles to pay you back? Life is unpredictable, and even the most well-meaning borrowers can run into trouble. If they fall behind, you’re left with a tough choice. Do you remind them of their obligation, risking tension and hurt feelings? Or do you let it go, potentially building up resentment that could sour the relationship? Neither outcome is ideal.
Even if repayment goes smoothly, the emotional dynamic of your friendship could shift. Once you’ve loaned someone money, it’s hard not to notice how they’re spending. You may find yourself silently judging their purchases or choices, especially if they aren’t in a hurry to repay you. That feeling—where your friendship starts to feel transactional—isn’t something you can easily undo.
There’s also a practical side to this. If your friend’s financial situation were stable, they’d likely qualify for a traditional loan through a bank. The fact that they’re coming to you suggests they may not have other options, which increases the risk for you. If things go south, that’s not just $25,000 lost—it’s a friendship that might never recover.
Here’s the hard truth: Money is replaceable, but friendships are not. If this loan jeopardizes your connection, even slightly, it’s worth asking if it’s really worth it. Is the short-term help you’re offering more important than preserving the relationship in the long run?
If you do decide to move forward despite these risks, treat it like a formal business deal. Put everything in writing, spell out repayment terms, and agree on what happens if they miss payments. But honestly? The cleanest, kindest option might be to say no to the loan and offer your support in other ways—whether that’s helping them explore alternatives, brainstorming solutions, or just being there as a friend.
Because sometimes, the best way to show you care is by protecting what matters most: your friendship.