Why you should not lend money to family members.

[Etini]

This subject is kind of tricky but you have to be real about it. Is it advisable to give out loans to close family members? I would say a big No. Certain relationships are so delicate and money as powerful as it is can destroy these relationships for life. I think that it is better to give an amount of money you can afford to your family members than give them a loan with the hope of repayment.

Two things would likely happen in these circumstances. One is that you might lose the money if anything happens and they can't pay back the loan. This is because you might be constrained to go full length to get back the money. Another thing that would likely happen is that you would lose the relationship if you go all out to get back your money. Any way it goes, the outcome is always bitter. It should be avoided altogether.

 

[Heartstrings]

Personally I don't lend money to my family members,if any of my family member ask me of money and I have i don't have,I will tell him/her straight up and if I do I will give it to the person as a gift not borrow,I don't borrow money to family members why because they are family and I know it may cause a strain in our relationship if the person refuse to pay after I have borrow it out.

Mine is to help in my own little way,but I understand why some people don't like borrowing,and if you really want to borrow, there should be an agreement between you two,also make the person understand you also need the money and just given it out because it's a family. Despite the outcome been bitter,I still think you should borrow what you can afford to lose,as a family we are meant to have ones back and be there for each other.

 

[Carpon]

I do lend out money to family members and relations likewise. It's something entirely different and I think this is because me and virtually all my family members who I lend money to have a common mindset and we understand each other's plight.

I have a friend who when I give money to in the name of lending, I personally characterize it as bad debt. Now this kind of people are those I avoid when lending and even if am giving them money, I see it as an act of gifting not lending.

Some people are naturally that way and it is more common among relatives. They feel we are related and therefore there is no need for them to even pay back the money they rented. But nevertheless, I still lend money to some specific relatives who understand this and will pay back even though at times, I personally decide to not collect the refund.

 

[Alberello75]

About this, I'm totally agree with you. To close relatives such for example to one's own parents, the term "lending money" does not seem to me at all appropriate either. In fact, there is no such thing as money to cause the ruin of any relationship, be it with family members, relatives or perhaps even with our best friends. Therefore from my point of view, always admitted that I had the possibility, I could directly give a certain amount of money in order to help my loved ones if they had the need because perhaps they are in a period of serious economic difficulties. But this should be a decision that I should first of all propose myself. This obviously by making the concrete assessments according to my possibilities before making the proposal.

 

[PolySteam]

Agreed. Rather look at it as an investment or a gift. Paid in stages if possible since it gives the person you giving money to a chance to prove they spending it well or investing it and you can see it working. Otherwise you give money to someone who just expects it and asks for it for every little thing. I think it's fair to expect a certain amount back in return even if it doesn't mean getting money back but having that person use the money well or later thank you for it. You never know maybe one day they can pay you back or perhaps do a favour for you or some work or something else of value to you.

 

[Yusra3]

If you are considering lending money to family members, think again.

Lending money to family members is a bad idea for many reasons. First of all, it can cause problems for both parties. If you're lending money or even just giving them access to your checking account. you may have trouble collecting on the loan if something goes wrong. You also run the risk of having them take advantage of your generosity and spend it on things you don't approve of or that don't help them become better people.

Second, if anything goes wrong with the relationship between you and your loved one, you'll wind up paying it off yourself! This can be very expensive and stressful, which is why we recommend that our clients stay away from this kind of situation altogether.

 

[Carson20t]

Very valuable advice you have given there, the thing is that there is a high probability for a family member to default when they get a loan from you as opposed to just the regular people. In the long run, I have discovered that it has more to do with a sense of entitlement for whatever reasons that they deem so because they may confine in you and you would clearly state that you are getting the money from a source that you would need to pay back but still they will breach the contractual agreement that you initially made.

That is my experience in all the situations I have encountered.

 

[PolySteam]

Very valuable advice you have given there, the thing is that there is a high probability for a family member to default when they get a loan from you as opposed to just the regular people. In the long run, I have discovered that it has more to do with a sense of entitlement for whatever reasons that they deem so because they may confine in you and you would clearly state that you are getting the money from a source that you would need to pay back but still they will breach the contractual agreement that you initially made.

That is my experience in all the situations I have encountered.

This is why you should rather let them prove themselves with a small amount you give them. If they do what they said they would with the money and honour your deal you made with them then I see no issue with giving them more. But that's only because they have proved themselves. If they feel they are entitled then they should get nothing. Attitudes like that are negative and only cause problems.

 

[Alberello75]

Well, from the comments I'm reading in this thread I'm deducing that, most of the people here pretty much disagree about lending money to family members. However, first of all, there would be an initial question that we will have to ask ourselves regardless of what the decision is, whether to decide to lend money or not. The basic question is: this family member that just in case we plan to lend money to, he or she who is, does he really need it urgently?
In my opinion, in this fundamental question we easily find the answer to our possible decision. And so here as in everything, one must think very carefully before acting.​