Lending money

1. First and foremost , remember , you are not a bank

2. With item 1. in mind remember this dialogue

Them: Could you loan me some money

You: Gee I'd really like to help you seeing as we are friends/relatives BUT , I'm going to have to pass

Them: But why, why !?

You : Because I would not be able to hurt you if you did not pay me back.

3. With item 2 in mind, get it crystal clear in everyone's mind that this is a loan

And loans have to be paid back. Tony Soprano breaks your legs, the bank takes your house.

What most people would be looking for is a forgivable loan, and that you , as a friend /relative would not take their house or break their legs if they did not pay.

4. Make sure the terms of the loan are understood.

In other words, the payment amount, the date on which each payment is due, and consequences of failure to pay

5. Never loan out more than you can afford to lose.