How to Track Money You've Lent to Friends
Most people track informal loans in their head, then quietly write them off. Here are the options, honestly compared.
The most reliable way to track money you have lent is a record both people have agreed to: the amount, what it was for, and when it is due back. A private note or spreadsheet is better than memory, but only a shared, signed record removes the disagreement about what was actually agreed, which is what informal loans usually founder on, not dishonesty.
Why memory is the worst option
Informal lending rarely goes wrong because someone set out to avoid paying. It goes wrong because two people walk away from the same conversation with different recollections. One heard "pay me back when you can", the other heard "this one's on me". Months later neither can prove anything, and raising it feels like an accusation. Whatever method you pick, its real job is to make that conversation unnecessary.
The four common approaches
A note on your phone
Works well because: Free, instant, and no one else has to install anything.
Falls down because: Only you can see it, so it proves nothing if the other person remembers the arrangement differently. Easy to forget entirely.
Best for: One-off small amounts you would not chase anyway.
A spreadsheet
Works well because: Handles many debts at once and does the arithmetic for you.
Falls down because: Still one-sided, still unsigned, and you have to maintain it by hand. Nobody keeps this up past a few months.
Best for: Shared living costs among housemates who all trust each other.
A bank transfer reference
Works well because: Timestamped by your bank and hard to dispute that the money moved.
Falls down because: Proves a payment happened, not what was agreed. A transfer with 'loan' in the reference does not establish a repayment date.
Best for: Supporting evidence alongside something else, rarely enough alone.
A signed digital IOU
Works well because: Both people agree the amount and the date in writing, both hold a copy, and the balance updates as it is repaid.
Falls down because: The other person has to sign, so it takes a minute more than a note.
Best for: Anything large enough that you would be genuinely annoyed to lose it.
What to record, whichever method you use
The details that matter are the same regardless of where you keep them: the full names of both people, the amount, the date the money changed hands, what it was for, the date it is due back, and whether any interest applies. If you are writing it down at all, these six things take no longer than a vague note and are far more useful later.
Is a written IOU legally binding in the UK?
A written agreement between private individuals can form a binding contract where it sets out the parties, the amount and the repayment terms, and both people sign it intending to create a record they can rely on. That is a low bar to clear and does not need a solicitor for a small, straightforward loan. For larger sums, secured lending, or anything complex, take proper legal advice. See our free UK loan agreement template for a version you can fill in.
This is general information, not legal advice.
Where SharePay fits
SharePay is built for exactly this. A Promise records the amount, the reason and the repayment date, then both people sign it from their own phone. Each side keeps a timestamped copy, and the balance updates as it is paid down, so there is never a question of who owes what. It is free to create and free to sign, and SharePay never holds the money; payment happens directly between the two of you, however you normally pay each other.
If you would rather not use an app at all, the printable template covers the same ground on paper. The important part is that both people agree to the same record, not which tool holds it.
Related guides
- How to get money back from a friend: what to do when a loan is already overdue.
- Lending money to family without regret: why loans to relatives need extra clarity.
- How SharePay works: the three steps behind a signed Promise.
Stop tracking loans in your head
Create a promise in about a minute. Free to create, free to sign, no card needed.