Loaning friends money

[DaveBrown74]

There is a lot of real wisdom, intelligence, and life experience on this board, so I figured this would be a good group to ask a bit of a tricky question.

What are your general overall thoughts on loaning friends money? Have you done it before? What were the circumstances in your friend's life that led to him/her asking you for the loan? Was it a very substantial amount of money? Did you get paid back when the friend said he/she would? If they didn't pay on schedule how did you handle it? Did it impact your friendship? If you said no, did it impact your friendship?

Do you have any rules of thumb on this practice? Do you have a firm, "hard no" policy under all circumstances, or are you more case by case? Or do you basically to it almost anytime a good friend asks? If the latter, how have the results been as far as getting paid back?

I have loaned friends money before myself but I have mixed feelings on the broad subject, and I have a situation where I think I'm about to get asked by someone, possibly for a more meaningful amount than what I have done with people in the past.

I'm just curious what your experiences have been around this subject and what if any rules of thumb you have.

Thanks in advance.

[Jolly Blue Giant]

When it comes to loaning money to friends or family, you do so knowing full well it might never be paid back. If your friendship is close knit and you don't get your money back, accept it and move on. True friendships are hard to find.

As far as family goes...there is practically zero chance of getting it back. I'd be rich if my adult daughters ever decided to pay back the money they have borrowed over the years. I bring it up now and then just to listen to their excuses. One of daughters who works at Binghamton University (who together with her husband, make four times what I make) asked me to borrow some money because she needed something at the grocery store. I handed her a 20 and she looked at me like I was from outer space and said, "I was thinking more like a hundred". So I gave her the hundred.

One rule of thumb: If you truly don't have it, say so. And if you do have it and can make ends meet by losing it (because you will), then go ahead and do it. Life is short and money is merely a tool to survive. We ain't takin it with us

[Ed Vette]

I agree, always take the mindset that if you loan money to a good friend that you are giving a gift. That said, if the amount is substantial that person has an obligation to repay it. After getting burnt for $2500 as the cost for finding out that guy wasn't a friend, I would not lend anything over a few hundred to a friend. I have been repaid large amounts in the past and that shows the character of the person. If you have to mention it when you know they can afford to pay you, then that's what should be done if it's thousands of dollars.

Close family is different. I would do what I could afford to do. Again, think of it as a gift.   

[DaveBrown74]

Thanks guys. I am largely on the same page, and I agree with the point about really close, true, loyal, good friendships not always being easy to find. I also agree that you always help family in need provided you're able to, and it is much better to treat it as a gift.

[jimv]

I've never been asked for a loan by a friend.  But I give money to my kids.

[LennG]

I have loaned money to friends, but nothing more than what one would call pocket change, nothing more than $100. Most of the time it has been repaid, but if it wasn't, I wouldn't worry about it. Just I would know not to do it again with that particular 'friend'.

No one in my family has ever asked to 'borrow' money from us. We do not have a big family except for our immediate family, so if anyone ever needed money and asked I would surely give. I always wondered if a sort of distant relative asked, what I would do, and probably would say no thanks.