How much is the loan?
What is the repayment plan and time period?
What is the interest rate?
Why can't the person get a loan from a credit card or commercial institution?
Are there any late payment penalties?
is there any collateral?
does the person have a problem with drugs or alcohol or gambling?
What will be different in the future to enable them to repay this loan?
Do they owe money to or are borrowing money from anyone else?
If you do not make the loan what will that do to your relationship with the person?
What sacrifice is the person willing to make to ensure the loan gets repaid?
Where does repaying you fall in their list of priorities?
What is the loan for?
Note that the last question is “what is the loan for?” It is debatable whether this question is should be included at all. What the loan is for is only of passing importance on making this loan. Make no mistake loaning money to a friend is a lousy investment strategy. It is not a business decision. It is an emotional decision.
Also posted at GetToKnowU
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