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How To Lend Money To Friends Without Losing Both

A tale of two loans and two friendships: Guiliano Stiglitz, an executive who lives in Miami and London, says he has never had any resentment over money he loaned to a friend, even as much as $200. “I write it off immediately,” he says. “If they return the money, it is a pleasant surprise. If they don’t, well, I already knew.”

But Vivian P., a textile designer in New York City, felt differently about the $300 she loaned to a friend who needed it to pay her rent. Vivian’s resentment flared when the loan went unrepaid, and the friend regaled her with shopping stories. “Soon after, I was desperate for money, pregnant, and terrified. I was confiding in her as a friend,” she recalls. “I remembered I lent her the money, and she was convinced we had made a deal where I said she didn’t have to pay me back.”

A Sensitive Subject

Lending money to friends and family ranks among the most pernicious of relationship stressors. An unrepaid $100 here or there may only engender bad blood (or a write-off), but what about $8,000 for a new car? Or $10,000 to pay tuition? With thousands of dollars on the line, no karma is worse than that carried by unpaid debt.


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