Loan Blogger

The Risk of Loaning Money

Everyone has had the situation pop up where a friends or family member has asked to borrow money.  This is always a tricky situation.  It is often a situation where you feel obligated to loan them money without considering the risk.

It is your money, though, and you do not have to loan it to anyone.  Loaning money to friends or family is actually quite risky.  They have a lot of power over you and this can lead to you never getting repaid.

Of you only lent them $20 or $30 then not getting it back may not be that big of a deal, but if you loan larger amounts of money it could be a problem when they do not pay.

Loaning money to friends or family is something you should really consider carefully. Do not simply assume they will pay you back.  If you loan a large amount then make sure you know when it will be paid back.  You have to state the terms of the loan clearly so they understand it is not a gift, but an actual loan that must be paid back.

You can not be too worried about your friend or family member’s feelings that you do not look out for yourself.  People lose money al the time to bad loan deals they make to people they think they can trust.