Once a family loan agreement is signed, a lender's job is mostly to do nothing: let the automatic payments arrive and keep simple records. This Q&A covers what to keep for the CRA if you charge interest, how to track payments, and the calm sequence to follow if a payment doesn't show up.
The signatures are on, the documents are delivered, and the awkward conversation is officially behind you. From here, your job is mostly to do nothing: let the automatic payments arrive, keep the completion email, report any interest you receive, and respond calmly if a payment is ever late. Here are the questions Canadian lenders actually ask in the weeks after signing — answered straight.
Do I need to do anything now?
Almost nothing — and that’s the design. If the money hasn’t moved yet, send it by bank transfer or e-Transfer with your agreement’s payment reference in the message field, so the advance is provable forever. Then suggest, once, that the borrower set up an automatic recurring payment with their bank. After that, your job is to let the schedule work.
Should I remind them before each payment?
No — and resisting the urge is the most valuable thing a family lender does. The agreement exists precisely so that no human has to do the chasing. If payments arrive, stay quiet; the healthiest family loans are the ones nobody mentions for years. Reminders convert a working system back into a relationship strain.
What does the CRA need from me?
If the loan is interest-free: usually nothing. Repayments of principal are your own money coming home — not income, not reportable. If you charged interest, the interest you receive is taxable investment income and belongs on your return — the short version of the rules is here, and how families actually pick rates is here. There is no form for the loan itself. One exception worth knowing: if you lent to your spouse or common-law partner and they invest the money, the CRA’s attribution rules can tax that investment income in your hands — unless the loan charges at least the CRA prescribed rate (3% for October–December 2026) and each year’s interest is actually paid by January 30 of the following year. The spousal loan guide walks through it.
What if a payment doesn’t arrive?
First assume logistics: a cancelled automatic payment after a bank switch is a common culprit. A light, blame-free message resolves most of it. If money is genuinely tight, renegotiate a smaller reliable amount in writing that you both sign — your agreement can only be amended that way. And if it ever truly stalls, the Canadian court cases show exactly why your signed agreement puts you in a strong position — small claims courts across the provinces handle these routinely.
Where do my documents live?
Attached to your completion email: the signed agreement and the certificate of completion. Keep that email. Any copy can be independently verified at any time at verify.trylendright.com — the check confirms the document matches what was actually signed, byte for byte.
Keep the payment evidence beside those documents. Our family-loan repayment records guide includes an e-Transfer checklist, cash receipt and paid-in-full confirmation.
Common questions
Do I have to report a family loan to the CRA?
Not the loan itself — there’s no form for lending money, and repaid principal isn’t income. Interest you receive is taxable and goes on your return. If you lent to your spouse or common-law partner to invest, attribution rules can tax that investment income to you unless the loan charges at least the CRA prescribed rate (3% for October–December 2026) and each year’s interest is paid by January 30.
What should I do if a payment is late?
Start with logistics — a cancelled automatic payment after a bank switch is a common culprit — and send a light, blame-free message. Then check your agreement’s missed-payment clause: it either gives the borrower a set number of business days to catch up or lets you call the whole balance by written notice. If they need a smaller payment for a while, agree it in writing that you both sign.
How long do I have to act if the borrower stops paying?
It depends on your province. In Ontario, Alberta, BC, Saskatchewan, Manitoba, Nova Scotia and New Brunswick, you generally have two years from a missed payment to sue — or, for a loan repayable on demand, from when your demand goes unpaid. PEI, Newfoundland and Labrador and the territories generally allow six years. A signed written acknowledgment of the debt, or a part payment, restarts the clock.
What should I do when the loan is fully repaid?
Close it out kindly and on paper: send the borrower a short email or note confirming the loan is paid in full. Then keep the completion email, the signed agreement and the bank records of every payment for several years — especially if you reported interest, since those records back up what you told the CRA.
We write plain-language guides on lending between family and friends in Canada, reviewed against current provincial and CRA rules. LendRight is not a law firm — this is general information, not legal advice.