- Step 1: Determine your capability to lend the money, and do so only if your own finances are in order and your bills are paid.
- Step 2: Determine if you are uncomfortable with lending the money or feel pressured. It may come back and hurt the relationship.
- TIP: Consider making the money a one-time gift instead of a loan if you are worried that payback might complicate the relationship.
- Step 3: Be upfront about interest payments and when the loan is due.
- Step 4: Put the agreed terms in writing and make sure both parties have signed copies of the contract.
- TIP: Consider using a third party – a lawyer or other intermediary – to oversee collection of the debt.
- Step 5: Educate yourself about tax issues related to loan interest and gift-giving so that you are aware of any additional tax burden or write-off you might incur.
- FACT: In The Inferno, Dante described a special section of Hell that was reserved for usurers, money lenders who charge exorbitant rates of interest.
You Will Need
- A loved one
- A contract
- A third-party collector (optional)