Ask the Dolans: Should I loan money to a family member?

Ken and Daria Dolan, America's First Family of Personal Finance, answer your money questions every Friday.

Click here to ask Ken and Daria your question.

Dear Ken and Daria,

A family member has asked me for a loan. Is this a good idea, and what is the best way to go about it?

-Marion

Would you -- should you -- lend money to a family member or friend in need? During these tough economic times, you may be asked to be "bankers" for someone going through a period of unemployment or having trouble making ends meet. While we know you want to help, it's important not to let your heart overrule good sense.

This is a big step that could cause future problems and we want you to protect yourself. Let's talk about what you need to consider before making your decision, and how to loan money the right way.

A written agreement can help protect you from future problems when loaning money to family members. Get started with Ken and Daria's sample loan note, available only at Dolans.com.


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