Guide · Personal loans

You helped them out.
Now it’s awkward, and unpaid.

Lending to someone you know sits in the worst spot: too personal to sue over lightly, too much money to write off. The law is calmer about it than you are: a loan is a loan, messages count as the agreement, and there's a formal route that often gets you paid without ever seeing a courtroom.

1.A loan between friends is still a debt

You don't need paperwork. Messages agreeing the loan and the repayment, bank transfers with references, even a consistent pattern of chasing: that's evidence of a contract. The awkwardness is social, not legal.

2.Interest, once it gets formal

That means the longer they leave it after proceedings start, the more it costs them, which is worth saying, factually, in a letter.

County Courts Act 1984 · s.69 · Power to award interest on debts and damages.
"before the county court for the recovery of a debt or damages there may be included in any sum for which judgment is given simple interest, at such rate as the court thinks fit or as may be prescribed, on all or any part of the debt or damages in respect of which judgment is given, or payment is ma"…
In plain English: If you take someone to court to recover money they owe you, the judge has the power to add interest to that amount. This ensures you are compensated for the time you were kept waiting for your money.

3.What to do

Want to know where you stand?

Tell us what happened in your own words. We check it against the law above, free, and give you a straight answer either way. If the law is on your side, your formal demand for payment is £2.99.

Check where I stand, free →

Small-claims limits differ: up to £10,000 in England and Wales, £5,000 in Scotland, £3,000 in Northern Ireland. This is guidance to help you understand your rights, not formal legal advice, and we're entirely independent: no affiliation with Citizens Advice, GOV.UK or any law firm. Every quotation above links to the official text so you can check us. Law verified current at July 2026.