When "loaning" money to family and friends as the "lender" assuming it's a gift from the get-go is crucial. Or you just mutually agree it's a gift and move on.

When "loaning" money to family and friends as the "lender" assuming it's a gift from the get-go is crucial. Or you just mutually agree it's a gift and move on. 1) If you are going to be financially impacted in any way by not having the loan repaid you should't "loan" (gift) it. Like gambling don't do it if you can't afford to lose it. 2) Assuming #1, the overall psychological stress and potential impact on the relationship just isn't worth it. As the "lender" you should feel good about helping someone while learning something about them in the process. Personally, in having this outlook with family and friends they essentially get one shot. If all parties agree it's a loan and the debtor doesn't pay back the funds I move on without impact to the friendship but mentally they have a "strike" in my mind that essentially says "they can still be a good person and friend, but money can never enter the relationship again". I feel like it's a decent balance.