How to lend money to a friend in Germany with the possibility to enforce return if he doesn&#39;t pay back?
<p>I hope the title itself is clear. I want to lend money to a friend, are there any legal ways that I can make some sort of a 'contract' for the return? What is the most practical way?</p>

<ol>
<li>Choice of <strong>jurisdiction</strong>: You’re pretty much free to choose your jurisdiction. You don’t have to contract under German law. The German state will intervene though if you’re doing criminal stuff.</li>
<li>Legally, the best is of course to draft a <strong>written agreement</strong>. You’re completely free in the terms (unless it becomes immoral, <a href="https://www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html#p0417" rel="nofollow noreferrer">§ 138 BGB</a>), but a loan, <a href="https://www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html#p1754" rel="nofollow noreferrer">§ 488 BGB</a> (<em>Darlehensvertrag</em>), with a 0% interest rate (if it’s meant as a short-term aid) is standard.</li>
<li>The <em>next level</em> is to <strong>collateralize</strong> your loan, specifically with a pledge, <a href="https://www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html#p4533" rel="nofollow noreferrer">§§ 1204 ff. BGB</a>, i. e. your friend gives you a valuable item which you may (and actually <em>have</em> to) sell for profit if he doesn’t return the loan. However, unlike contract law, in <em>property law</em> you are <em>not</em> completely free regarding the terms (numerus clausus of property law, <em>Typenzwang des Sachenrechts</em>). Here it becomes too difficult though for the layman, so I wouldn’t recommend that unless you <em>know</em> what you’re doing.</li>
<li>Ultimately, I/we think it’s nice of you to consider helping out your friend, but as <a href="https://law.stackexchange.com/questions/78245/how-to-lend-money-to-a-friend-in-germany-with-the-possibility-to-enforce-return#comment166570_78245">Nike Dattani</a> already portrayed it can get <em>really</em> nasty if you intend to legally enforce such matters. <a href="https://law.stackexchange.com/questions/78245/how-to-lend-money-to-a-friend-in-germany-with-the-possibility-to-enforce-return#comment166579_78245">Trish</a> mentioned the saying: <strong>Friendship ends where business begins</strong>. I, too, suggest to refer your friend to a pawnshop, research (third-party) microloan opportunities, and help him <em>without</em> directly giving him cash, dine together and offer company (i. e. address the psychological dimension financial troubles entail).</li>
</ol>
<p>PS: <a href="https://www.gesetze-im-internet.de/sgb_1/__9.html" rel="nofollow noreferrer">§ 9 SGB Ⅰ</a>: Germany is (to some degree) a <strong>welfare state</strong>. Maybe your friend is eligible for some kind of assistance. However, and probably typical of Germany, if you want to <em>get</em> money, you have to fill in forms.</p>

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