lending money

What are the Do’s and Dont’s of lending to family or friends?

(MoneyHippo.com) – Lending money to family or friends can be a delicate and complex issue, and it’s important to approach it carefully to avoid damaging your relationship. Here are some do’s and don’ts to keep in mind when lending money to family or friends:

  • Be clear about the terms: Clearly communicate the terms of the loan, including the amount, interest rate (if any), repayment schedule, and any other relevant details.
  • Put it in writing: Create a written agreement that outlines the terms of the loan and both parties sign. This can help prevent misunderstandings or disputes down the line.
  • Consider alternative ways to help: If you’re not comfortable lending money outright, consider alternative ways to help, such as giving a gift, co-signing a loan, or offering to help the person find other resources.
  • Maintain communication: Stay in touch with the borrower to ensure that they are making progress on repaying the loan. If there are any issues, try to work together to find a solution.


  • Don’t lend more than you can afford to lose: Only lend money that you can afford to lose, as there is always a risk that the borrower may not be able to repay the loan.
  • Don’t ignore warning signs: If the borrower has a history of financial problems or has been unreliable in the past, think carefully before lending money.
  • Don’t lend on impulse: Take the time to carefully consider the request and the borrower’s financial situation before agreeing to lend money.
  • Don’t let money come between you: If the borrower is unable to repay the loan, it can be easy for money issues to damage your relationship. Try to keep the focus on finding a solution that works for both parties.

Overall, lending money to family or friends can be a complex issue, and it’s important to approach it with caution and clear communication. Be sure to consider your financial situation and the risks involved before agreeing to lend money, and be prepared to take steps to protect your interests if necessary.

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