So I have a family member who has asked for a loan. We have a good relationship. He has done a lot for me in the past. I do not want to make this loan. I think it will put significant strain on our relationship. I do not want to be sitting there at a family BBQ in awkward silence as we are both trying to make small talk and not talk about him owing me money.

I can afford to make this loan but it will mean canceling our vacation the fall. Whats more He knows I can afford to make the loan.

Any thought ? Should I suck it up and make the loan? How Can I tell him “no”?

Any loans made to friends and family are always made as gifts. This way if you never get the money back its no strain. If you do, consider it a blessing. Only give money if you can afford to do so.

Champion's got it right. We have been through this many times and it does cause hard feelings when they don't repay. So now, if the need is worthwhile and we can handle it, we consider it a donation.

I am wondering a couple of things. would this loan fix a problem or prolong the inevitable? will he be hitting others up to take care of things and I will be just be one in a line to be repaid?

I realize whenever you lend money to family it is NOT a business decision - you could very well never get it back

13 questions to ask and answer before you loan anyone money
http://www.gettoknowu.com/LifeLessons/LifeLessons_Loan_Money_to_a_Friend.php

With all due respect Moab, Its not up to you to determine the outcome of their decision, but only can you afford to make the money gift. I.E. You can pick who you want you daughter to marry, but you can't pick who she will fall in love with.

Been there .... here's how it happened for us:

Relative asked for quite a bit of money as a loan.
We said that the sum in question HAD to be a LOAN because it was too much to be a gift. As a potential lender, we said we'd consider it, but wanted first to do what any lender would do - and that was get a full picture of their debts, income etc. They told us and we were able to determine that they needed something different than a loan - they needed a good bankruptcy attorney, to hand back the fancy car, etc. We recommended financial experts, etc ---- and we gave them a very small loan - one we hope to get back but one we will not feel terrible if we don't.
No hard feelings on either side .......

if you decline to loan a friend money you may loose a friend.
if you loan a friend money and they don't repay, you loose a friend and the money.

I hate to say this but I have been in the position of having to ask a relative for money. They could easily afford the loan but it was much harder for me to repay the loan. I did finally repay the loan but the whole time I had the debt I felt very uncomfortable and so did the person who loaned me the money. Everyone is in an difficult position; don't loan the money, give it as a gift or not at all.

..why don't they just go get a bank loan?

they may not have the proper credit to do so

family member? Direct or indirect? Your kid, nephew, in-law? Makes a big difference?

"Any loans made to friends and family are always made as gifts." Think champion has it half right - family for sure - friend...not necessarily.
jmho

RYKAT IS ON THE MONEY...your relationship will NEVER BE THE SAME AGAIN ..But it is what it is .

On the other hand ...... what the heck is money for ? To make life work - and to help those in need. We raise funds for victims of famines, for schools, for orphanages ...... and we feel put upon by a request from a friend or relative?
I think it's more about taking a good look at each circumstance - if you have a completely irresponsible person asking you for money, just say no. If you have a responsible person who is in a bind (and many are today due to no fault of their own) then maybe think about how easily it could be you in trouble next time, needing help.

I do not disagree with that. I would give my children every penny I have if they were in need.
A friend, I would loan money to, HOPING that it would be returned one day.

Ry...can I borrow $20.00 for lunch tomorrow?? Please....lol

Under one condition.................You have lunch with me, Rhonda! LOL!!!!

I never loan money I know I might need back.
I would loan, like, $20 or $40 bucks, but that's it.
For the most part people don't pay the $$ back, or you have
to chase them around to get it. They end up justifying the
non-payment back in their head. Loaning money is a sure way
to lose a friend or make an enemy out of a relative.
You should NEVER let anyone know that you are comfortable
enough to lend money. The same goes for co-signing a car, house, etc. My husband co-signed a car and the person quit making the payments so he had to send someone to go repossess it. Pain in the *ss.

I agree with the majority. Belize folks as well as many in Latin America feel that if a family member provides money to another family member in answer to a request, in the long run it won't be paid back. And if the borrower perceives you as generous enough to make the first "gift" there may be no end to the requests. If it's a life and death situation for which money is needed compassion may direct one's attitude to comply with the request.

If the request is for a significant amount of money and the borrower appears to have the means to pay the money back, make specific terms for repayment a part of the agreement to lend. If it's not repaid, end of story.

Take my advise, dont do it.if you must,ask to hold some jewelry,every body has jewelry. hold it till they pay up,if not you have no loss.i speak from experience. i wish my family member had taken this advise.

Just my two cents here. The question might come up, "why"? Is the problem related to a dire need, or a want? Do they have a plan B in case you won't or can't lend them the money? In any case, if you do lend, get the legal paperwork done.

Okay Ry! I'll ask Peter...;)

Very interesting read here... we had a situation occur in our family very recently where a family member had to come clean about $10,000 investiment that got spent. The indended purpose was to use it for an investiment and the loanee promised to pay back the loaner within 1 year and with 10% interest. The intent was there, but with a market like this, who knows. The loaner has learned a very valuable less here and that is what most of you have said, consider it a gift (which the loaner refuses to do).

Anyway, I would borrow from a bank before asking from any friend or relative. Because should I not be able to pay it back, I would never feel ok with myself.

On that note, I believe I owe Colin some money for ribs we had one night! Anyone else? I'm paying up! :P

LOL . . it took longer to sort out that bill than it did to eat dinner!!

no kidding!!!