Suppose my friend has taken some loan from me and there is no verbal/written contract. He is just supposed to return the amount to me any time. I observe his financial conditions and decide to “forgive” the loan, decide not to take it back and let him know of my decision. Which word should I use in this situation?
Hi Tom, I would forgive the loan, and waive the deduction.
The deduction is like a penalty, or a fine.
If you wish to communicate your intention to forgive the loan, you may have a problem with "hurting the person's feelings" when using that particular term. It might be better to tell the person to "just keep the money."