The Politics of Loaning Someone Money

March 31, 2010 by  Filed under: Loans 

Given the recent economic turmoil, many of us have friends and family members who have fallen on hard times and need financial support. Helping someone with a loan is a generous good deed, but before you reach for your wallet it’s important to ensure that you – and your relationship – are protected.

For instance, I know a woman who loaned money to her boyfriend. Nearly a year later, he still hasn’t paid her back, and the two ended up splitting up because of it.

To avoid the same mistake, keep the following pointers in mind if you’re considering making a loan.

Don’t loan more than you can afford to lose. Don’t risk your own financial ruin with an overly generous loan. Realize that there is a risk that you may never get paid back, and that your own fortunes may change. Perhaps you’re flush now, but next month you could be in desperate need of the money you loaned. That doesn’t mean you shouldn’t make the loan; just be sure to have plenty of savings socked away to protect your own financial interests.

Keep a paper trail. If your friend can be brave enough to ask for money, you should be brave enough to ask for a legally binding written agreement. Just say you need it for your financial records. Outline how much will be loaned and when the loan will be paid back so that way there’s no misunderstanding later on.

Don’t lord it over the recipient. Don’t constantly pester your friend, or make snide remarks about every purchase they make. How they spend the money is their decision. Loaning them money was your decision.

Be flexible. If your deadline has come and you’ve yet to be paid back, talk gently with your friend about alternatives. Say, “I know times are still tough but I just want to follow up.” Be sensitive, but suggest a recurring payment plan-even if it’s $10 a week-just to get the ball rolling.

Juanita Ecker, president of Professional Image Management, is a business etiquette and international protocol consultant. She can be reached by phone at (518) 279-9388 or online at

By Juanita Ecker

©2010 Professional Image Management

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