Should i let family borrow money

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Keep Your Expectations Low. Expect Slow Re-Payment. Make a Checklist. Remember the IRS. No Secrets. The Bottom Line. Key Takeaways Treat loans to friends and family as a business deal, and keep all your emotions out of it. Don't expect to be paid back but if you do, expect it to be on a slow timeline. Make a checklist of questions you need to answer before you open the coffers. Consider gifting the money instead of loaning it. Failing to set expectations and write it down always leads to regret.

When he was a front-line credit counselor, McClary saw people dip into their retirement savings or borrow money themselves in order to lend to a family member in need. By putting the terms of the loan in writing, this becomes a financial transaction, eliminating the possibility that the borrower might consider this a gift. The Bankrate survey also shows the potential pitfalls of lending your credit card to a friend or family member.

Of those who did this, 37 percent had something bad happen:. Of the credit card holders who did this, expecting to be repaid, most 70 percent said they did not get the money at least once 27 percent said it happened occasional and 23 percent said frequently.

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