How to give money to a loved one in financial need

It's not always a good idea to lend money to family or friends, but there's a way to get it right.

You Will Need
* A loved one
* Money
* Willingness
* A contract
* A third-party collector (optional)

Step 1
Determine your capability to lend the money, and do so only if your own finances are in order and your bills are paid.

Step 2
Determine if you are uncomfortable with lending the money or feel pressured. It may come back and hurt the relationship.

Consider making the money a one-time gift instead of a loan if you are worried that payback might complicate the relationship.

Step 3
Be upfront about interest payments and when the loan is due.

Step 4
Put the agreed terms in writing and make sure both parties have signed copies of the contract.

Consider using a third party – a lawyer or other intermediary – to oversee collection of the debt.

Step 5
Educate yourself about tax issues related to loan interest and gift-giving so that you are aware of any additional tax burden or write-off you might incur.

Fact: In The Inferno, Dante described a special section of Hell that was reserved for usurers, money lenders who charge exorbitant rates of interest.