It's a conundrum many know all too well, sometimes with painful results. A friend or family member needs to borrow a significant sum of money. Of course you want to help, but the stories about relationships ruined by failed repayment of loans are troubling. What's a would-be Good Samaritan to do?
Indeed, it's likely that you'll face this problem at some point if you have a bit of cash cushion lying around. A survey by Bankrate found that 60 percent of U.S. adults have lent moolah at some point to a loved one. Of those, 37 percent said they lost money and 21 percent reported the experience hurt the relationship.
This is an experience that Ezra Cabrera knows all too well. A few years back, a childhood friend borrowed $6,000 from the content marketing manager to pay necessary bills, like rent and utilities. "She lost her job at a time when she was diagnosed with depression. It was a tough time, and I felt nothing but sympathy for her," Cabrera recalls by email. "After a few days after she got the money, I received a call from her mom, asking if my friend was staying with me because the landlord said that her apartment was empty. Apparently, my friend ran away with my check and left her debts at home."
Understandably, this experience had a lasting effect on Cabrera. "Now, every time someone [asks to] borrow money from me, I always go back to this experience and immediately say 'no' even if my heart tells me that this person needs immediate financial help," Cabrera says. Not that she never helps anyone out -- a consultation with dad helped her to sort this out. "He told me that if I feel deep in my heart that this person is sincere and needs the money ASAP, I should just give whatever I can. Give money and not lend it to them."