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I wouldn't make this a loan. Either give him the money or not. Loaning it is a bad idea.

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i totally agree with this guy. When it comes down to it, you should only lend money that you are comfortable not getting back. Especially to someone between a rock and a hard place. This really is more an issue of your level of friendship than finance. If my mom was going to die unless i gave her 90 percent of my assets, I'd do it and not think about it. If my best friend did, I'd be like "dam that sucks, can i have your drum set?"