People might wonder, ‘is it illegal to lend money?’. The short answer to that question is that it is not illegal to lend money. However, there are many unpleasant aspects to lending out money that should not be ignored.
First off, people that lend money are not entitled to interest back. They can try to charge it, but legally, they do not have anything in the law that protects their rights. Furthermore, the person is not even legally entitled to getting one’s money back. If a person does not pay up, then they can not rely of the police to enforce the loan. The police consider this a civil matter and will not get involved. To the people expecting their dollars back, this can be a small slap in the face.
If the loan is large and quantifiable, they can take the matter to court. However, there are fees involved in making the claim. Also there is the risk that the person will still not be forced to pay up. It can be a huge headache to compile evidence for court if there is not a lot of paperwork.
In short, it is not illegal to lend money, but honestly, with all the hassle involved, it should be.