10 things to consider before lending money to friends or family

1. Never lend any amount you are not willing to lose.

2. Learn to say "It's not convenient" when asked to lend money.

3. Be wary of signing as a guarantor for someone else. In this country you can end up in prison.

4. Set a budget in your mind in case you are asked to help someone. Then say "honestly, it's not in my budget" when it isn't.

5. Know that you are not responsible for the troubles of others. It's ok to help others, but it is their problem so don't make it your own.

6. Remember that when the bank will not lend to them, they are probably a bad risk.

7. Offer to help them in some other way, perhaps pay them for work they can do for you, or help them find a better paying job.

8. Start building your own emergency fund. Make sure your loans and credit cards have insurance against redundancy. Get it in writing. If there is no insurance for unemployment — change your bank.

9. Ensure you have security for any lending you do. For instance, assign an investment they own to yourself, or get a letter telling their employer to deduct from salary to pay you, or take a post- dated cheque, or keep their credit card until you are repaid.

10. Don't assume they want to repay you. Many people are ahead of you in the queue for payment from the debtors.