This page is our recommended “best practice” guide for handling lending and borrowing money between friends and family members , which we sometimes call “acquaintance loan” and “FnF loan” here.

The SoKay System is built on SoKay Protocol

Well, if you haven’t done that but are considering, we would ask you to take a very long moment to reconsider.

Such loans have a high probability of resulting in awkward or, simply, bad situations. It’s usually hard to charge an interest or late fees, so the downside is even worse.

So, when you still have a choice, don’t do it, whether you want to borrow or lend.

Things are likely to get weird between you two, regardless what happens.

What to do:

• Politely say no.

• Don’t judge or patronize.

• Refer them to other financing sources: professional lenders, P2P platforms, etc. We have some recommendations here. You can have them take a look or simply use Google to find reliable ones.

• Negotiate better terms – charge interest rate or agree to only lend a portion of the total asking amount. Have you tried our launchpad?

Don’t know how to negotiate terms for the loan agreements with friends and family?

Say, you really just can’t turn your back on your friends and family members…because you are just nice like that. 

The next best thing to do is to have a formal agreement to clarify and record the terms of this transaction. 

Many people will just do a simple IOU as if it would hurt the relationship a little less. However, a friends and family discount doesn’t work well here. We would recommend that you use something more formal and protective, such as a promissory note. You can build your own or download templates from many sites on the Internet, such as eforms and Rocket Lawyer. SoKay also prepares a decorated version of our own that takes a more humanized approach, with some friendly notes you don’t find in common documents. You can take a look. If you like it, use it.

Better, notarize it to make it more solid.

While you are at it, another piece of advice we want to highlight is to take collateral. It is a common practice in the business world to manage risks, but we don’t use it enough in daily life.
In an event of default, at least you don’t lose every penny. 
If you want an extra layer of security, please consider using our secured promissory note template.

Now it’s time to think about getting the money back

Do you ask for that when the date is near?
Do you say it directly?
Do you insinuate? 

Right, it’s hard.

Most of us will be wishing for never having to do that. Human beings are probably just not wired to handle that degree of social awkwardness.

We remind for you.

SoKay understands that, so we have our own reminder system to help you with that. Please note that there’re a bunch of laws and regulations around that area, so our service is limited to gently “reminding” the borrowers on the lenders’ behalf.

If this is something you’d like to have arranged, we recommend that you have the reminder authorization form signed and submitted when doing the main loan agreement.

It may take a while.

Be firm.

Don’t feel bad.

It’s also a good idea to include a late fee clause in the Promissory Note. We have it in our template. Just remember to fill in with your rate.

The borrower is not paying back…

When you are reading this section, we understand your pain. Many people have gone through that.

Just know it’s all going to be okay.

The best option, actually, is still to keep pushing, telling the borrowers that you’re serious and it’s your money, and that there will be consequences if this nonpayment thing goes on. We’d also suggest that you send them those lending company referrals again.

Another good idea is to offer a payment plan. If you didn’t do an agreement earlier, now is also a good time to fix one with payment plans. Wanna try ours? Sure – here you go

In the worst of the worst scenarios…

Time to enlist some additional help


You might need a lawyer to take the case to the court. If the amount at stake here is sizable, we say this is all worth it. You may find such lawyers through your friends or on the Internet, like Nolo, LegalZoom, etc. We have a directory here for you to check out too. Reach out and consult. 

Debt Collectors

Working with debt collection agencies is another viable option. They usually charge a high commission, but a lot of them do have a “no success no fee” policy. Debt collectors can be quite useful and effective. Just make sure that the agency is legit and you understand the terms.

The red register

SoKay does keep a registry that accepts and processes claims of bad borrowers from the public. We do our own vetting and checking at our own discretion. Once your claim is registered, you will be notified. The Register is kept off the server to prevent from hacking and other kinds of data compromise. If you want to inquire about someone (check if he or she has a bad history), you can send an inquiry form and we will get back to you with results.