Should you lend them money? Ask yourself these 5 questions

Updated Feb. 18, 2025, 6:56 a.m. | By East Coast Breakfast / Skyye Ndlovu

Is someone asking to borrow money from you? Ask yourself these five questions first before you open your wallet.

Lending money to friends or family is like giving someone your Netflix password. You do it out of kindness, but there’s a good chance you might regret it later.

Before you reach for your wallet and play the hero, ask yourself these five questions to avoid turning a simple favour into a financial horror story.

1. Can you afford to lose this money?

Let’s cut to the chase: if this money never comes back, will you be fine? Or will you be eating instant noodles for the rest of the month, wondering why you didn’t just say no?

Ask yourself: if this person never repays me, will I be okay?

If lending this person money puts your own financial stability at risk, you have your answer. Don’t do it. Only lend money that you could mentally (and financially) write off if things go south.

2. Will this make things awkward?

Money has a funny way of making relationships awkward. If you lend your friend cash, will you suddenly side-eye them every time they order cocktails instead of paying you back?

Will you hesitate to invite them out because “Oh, so they have money for sushi but not to repay me?”

If the answer is yes, that’s a sign this loan might come at a higher price than you think. It might cost you your peace of mind.

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3. Do they have a good record of paying people back?

Some people treat borrowed money like a library book they never intend to return. If this person already owes five other people money, and their financial habits resemble a “how not to” guide, don’t assume they’ll become Warren Buffet when it comes to your cash.

It’s a simple rule: if they’re unreliable with their own money, they’ll be unreliable with yours. History has a funny way of repeating itself.

4. Have you set clear terms?

When lending someone one, a casual “Yeah, sure, I got you” is not a repayment plan. Before you lend anything, be crystal clear about these details:

How much? (No, “just a little” isn’t a number.)

When will they pay you back? (A specific date, not “soon”.)

Are they paying you back in instalments or a lump sum? (Because “I’ll pay you in pieces” could mean R50 a year for life.)

If they hesitate to give you clear answers when you ask for clear terms, consider that a red flag.

5. Can you help them in other ways?

Sometimes, lending someone money isn’t the only way to help them.

Could you cover a bill directly instead of handing them cash? Can you help them find a side gig?

Sometimes they don’t need a loan. Sometimes all they need is better financial planning. Offering them alternatives can save both your money and your friendship.

Also, it’s way more satisfying to be able to pay a friend’s bill or find them a new stream of income. That gesture goes a much longer way than lending them cash.

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If you confidently answered yes to all five questions, lending might be okay. If you hesitated on even one – especially the “Can I afford to lose it?” question – take that as your cue to politely decline.

Always remember, “No” is a complete sentence.