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Pros and Cons of Lending Money to Others

Updated on March 13, 2013

Money is an object that is accepted as payment for goods and services. The dollars and cents that we use to day help fund research projects, education, salaries, wages, and so much more. Due to our ever changing economy, there will come a time where you or someone you know may need to borrow or lend money. This article helps those to understand when it is appropiate to lend money to someone and why. The overall objective is for every and anyone to see that you should not always lend money because someone is a friend, but because you know why they need it and what they will use it for.


1. Self-fulfilment of helping another

When you lend money to someone else, you may or may not get a feeling inside that makes you feel good because you know that deep down inside you are helping someone else. The person that you are helping is struggling with a bill or putting food on the table and you are helping them to overcome their situation. You not only feel good about yourself, but you help the other person that you are helping to feel good about themselves as well, knowing that their situation will get better.

2. The More You Give, the More You Receive

There is a saying that the more you give, then the more you receive. This is all due to Karma and the sense that whatever you do will come back towards you twice as much. I believe that Karma is real and that you should tread lightly on how you choose to treat others. You can give as much as you want to one person or others all depending on how stable your own financial situation is.

3. Set A Budget

Since, you are the one giving away your money to another, you are also the one who can set a budget on how much you tend to give away. Your budget should be small around 10 or 20 dollars, especially if you have never lent money to that person before. On the other hand, if you have lent money to that person before then a small budget can be increased to a better amount that they need, all depending on how fast you know in which they will pay you back.

4. Set a Schedule

Also, since you are the person that is lending the money, let the person you know that you are lending it to, when you would want your money back. Letting them know ahead of time will help them to figure out whether or not they still want to borrow the money from you and if they are able to return it by the date you want it back. Let them know how even though they are a friend or a family member that they shouldn't be treated any differently.

5. Give Less than What You Have

This means that you shouldn't give more out than what you can afford. If you still have bills yourself, then maybe you shouldn't lend a friend or family member money until after you are financially stable for the month. Talk to your friend or family member on how you can or can't give them money and explain to them why. This way they will know that you aren't being selfish or stingy with what you have


1. Losing Control

This means that the person you have given the money to has excuses on why they can't give you the money back by the time that you like. Yes, you may know and respect them as a friend or a family member, but that doesn't mean that they won't use you or try to get one up on you. They don't respect you or see you as someone who means business due to your previous relationship with each other.

2. Too Much Money

This means that the person who borrowed money from you borrowed more than what they were able to financially return. This problem can occur at any time and is very hurtful and can even destroy friendships. Try your best to stay within your level of finances.

3. Disrespect

This means when the person you have given the money to, doesn't respect you and doesn't speak to you as if you were the nice person, who went out of your way to help a friend. This means that their attitude towards you changes because they see that the favor you have done as merely an obligation.

4. Lending Too Much

There will come a time, where you realize that you have lended too much money to too many people. Maybe it because you are way too nice and people tend to take control of that. Remember that even though you may want to help everyone, that you can't and sometimes you will have to tell them you can't give them money.If you end up lending too much, then you maybe the one who will end up needing to borrow some money.

5. Learning It's Not For Something Useful

Realizing that the money you have given to someone else is being used for clothes or jewelry is a hurtful thing. Of course, it may not be any of your business to know what they are doing with the borrowed money, but nevertheless you shouldn't be helping someone's habit on something they do not immediately need. It will have you looking silly and people will think that you can be used for such things.


Always remember to stay true to yourself and to never overextend your generosity. Give to those who honestly need the help and to those that respect you as a human being. Lend to those who will repay you back, when you need repayment and to those who you know will pay you back. Try not to lend more money than you yourself need. Never lend money to a lot of people at once, it may cause you to lose track of everyone that owes you money.

Have you lent money to anyone ?

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    • torrilynn profile image

      torrilynn 4 years ago

      @DDE i completely agree with you that you should be careful on who you lend money to even close friends

    • DDE profile image

      Devika Primić 4 years ago from Dubrovnik, Croatia

      Lending money to others ruins friendships often it won't be returned as promised. One should carefully consider who they lend money to.

    • torrilynn profile image

      torrilynn 4 years ago

      @sgbrown I agree I see it as if there is a mutual understanding then loaning money is okay and that you should be cautious of who you loan money to

    • sgbrown profile image

      Sheila Brown 4 years ago from Southern Oklahoma

      We have a good friend who was in need of some money last year. However, we knew that we would probably never be paid back, at least not in full. Knowing this, and the fact that the money was truly in need, we loaned him the money anyway. It did not put us in a bind and he is a good friend. If the tables had been turned, he would have loaned us the money. Now, at least until he can pay us back, my husband and I are getting free hair cuts. You do have to be careful who you lend money to, and need to realize that you can't lend more than you can afford to loose.

    • torrilynn profile image

      torrilynn 4 years ago

      @teaches12345 it is very true always loaning to someone can cause them to use you and to become reliant on you even mentioning that your always there for them

    • teaches12345 profile image

      Dianna Mendez 4 years ago

      I have learned to loan with only to those who have a sincere attitude. Enabling people is one thing I have learned to watch for in helping out with money. Yes, sometimes have to look at it as charity when you loan to others. Great post and holds all the pros and cons to consider before lending money. Voted up!

    • torrilynn profile image

      torrilynn 4 years ago

      @billy i agree with you somewhat I wouldn't mind doing favors for someone but when your constantly giving money away to one person that keeps asking and then the amounts of money start to get larger, you should start to expect something in return or at least talk to that person about how much they borrowed and how you have a problem with it

    • billybuc profile image

      Bill Holland 4 years ago from Olympia, WA

      If you loan money with no expectations then everything is alright. It's when we expect something in return, or we have our feelings hurt when they don't repay, that the problems arise. If I loan money I just expect to not see it again and I'm just doing it to help someone.