Lending money to a relative without damaging the relationship

Before lending

Ask yourself three questions.

• Can I afford not to see this money again soon?
• Does this person have a realistic way to repay me?
• Is it a loan, or a gift I would rather own as such?

Write it down and agree

Note the amount, the date and the instalments, and state that it is an interest-free loan. Choose a limited amount: lending what does not put you in difficulty if repayment is delayed avoids resentment.

During repayment

Avoid constant reminders; one gentle reminder at the due date is enough. If the person is struggling, propose a new schedule. Record each repayment and, if a gift is what is called for, better to say so clearly than to wait in silence.

Frequently asked

Should I refuse to lend to a relative with a poor repayment record?

You are not obliged to. If you want to help, you can give a small sum you regard as a gift rather than lend a larger one.

Read next

• Qard hassan: the interest-free loan, principle and good practice
• Writing down a debt and taking witnesses: what verse 282 recommends
• Repaying debts with the snowball method
• Repaying debts with the avalanche method: start with the costliest