It is always risky loaning to a family member or a close friend because money is a fragile topic for most people.

If it is only a small amount then maybe you can get away with it but it is when the amount starts to reach $$$'s or $$$$'s that the problems start to appear. Im sure many people have lent money to friends and family and had no problems at all but there is always stories where you lose a close friend or you fall out with a family member over money.

I can vouch for that as I did the exactly that. I lent £4000 to one of my close friends and after 18 months of asking him for it back he suddenly disappeared and could not get in contact with him for love nor money. After finally contacting me nearly 3 yrs later he told me he had gone bankrupt and could not pay me back. I could have gone to the police but at the end of the day, he had no money (apparently) so I decided to leave it. I recently read that he is getting married this summer so must have some money.

I suppose the moral of the story is only lend money to those who you know will be able to pay back and to make sure the amount will not be too missable should they not be able to pay back the loan.