Do you need it in writing? Less than you think — and more than you have
There is a widespread belief that without a signed contract you have nothing. That is not how it works — but the reassurance comes with a catch.
General information for the US, not legal advice. Rules vary by state; talk to a lawyer for anything significant.
Oral agreements are generally binding
An oral contract is legally enforceable. What limits this is each state's Statute of Frauds, which requires writing for certain categories — real estate, leases over a year, agreements that cannot possibly be performed within a year, and sales of goods of $500 or more under UCC § 2-201.
A personal loan usually falls outside all of those. Note the "within one year" test turns on possibility, not likelihood: if the loan could be repaid within a year, the statute does not apply even if everyone expects it to take three.
California's requirement that loans over $100,000 be in writing does not reach friend loans: Civil Code § 1624(a)(7) applies only when three conditions all hold — over $100,000, not for personal or household purposes, and made by someone in the business of lending.
Your text messages already count
Under the E-SIGN Act, 15 U.S.C. § 7001(a), a record "may not be denied legal effect, validity, or enforceability solely because it is in electronic form."
A WhatsApp message saying "thanks, I'll pay you back the $2,000 by June" is a writing. So is an email, so is a note in a shared app.
Getting it admitted is a lower bar than most people assume. Federal Rule of Evidence 901 requires only "evidence sufficient to support a finding that the item is what the proponent claims it is" — testimony from the person who sent or received it, or distinctive content, generally does the job.
And the civil standard of proof is preponderance of the evidence: more likely than not. Not beyond a reasonable doubt.
So where is the catch
The bar is low. Most informal loans are still under it.
A survey by JG Wentworth found roughly half of private lenders never put the agreement in writing at all and roughly half never set a repayment timeline. (Treat those figures as directional — it is vendor research, less rigorous than the Bankrate or LendingTree surveys.) The direction is consistent with everything else: the problem is not that people write bad contracts, it is that they write nothing.
And there is a second-order effect. In Estate of Bolles v. Commissioner the Ninth Circuit restated that intrafamily transfers are presumed to be gifts unless there was a bona fide creditor-debtor relationship with "a real expectation of repayment and intent to enforce the collection." An undocumented, unmentioned, never-chased loan starts to fail that description.
The proportionate version
For most loans between people who know each other, you do not need a contract. You need a record that:
- names both people and states the exact amount and currency
- gives the date the money actually moved
- says whether interest applies, and if not, says so explicitly
- states when repayment is expected
- says how partial payments are applied
- the other person has seen and acknowledged
That last one does most of the work. A record the borrower has seen and not disputed is worth far more than a tidier one they have never laid eyes on.
For amounts that would genuinely hurt to lose, that is when a promissory note — an unconditional written promise to pay a fixed sum, signed by the borrower — and a lawyer are proportionate.
The test I would use: if this money never came back, would it change something important in my life? If yes, get help. If no, a good shared record is enough — and is far more likely to actually get kept.