During the holidays it’s not uncommon for family and friends to ask you for money. What do you do when this happens? Is it every okay to loan your loved ones money?
Trust your gut. If you know that your friend or even a family member is not reliable then don’t take a chance.
Don’t overdo it. If the amount requested is too much, say something. But be careful, if you tell your sister you can only loan her half make sure you know who is going to be paid back first – you or whoever she gets the second half from.
Get it in writing. Make a contract and have both parties sign it. Even if it’s not much money this prevents any confusion. Include the amount and the date you need to be paid back.
Use a third party. If the amount is substantial you should consider using a peer-to-peer lending company. They can help you with any disputes and make the transaction less personal.
What do you think? Have you ever loaned money to a friend or family member?