Is it a case of more fool you if you lend money to friends?

Well you're certainly asking for problems if you lend money to anyone. So I guess, unless you're absolutely sure they'll pay you back or have a contract in writing to make sure they do .. you could be pretty foolish for sure.

I would not loan, but gift it, that way you never get let down.

It could depend on how much is loaned. A small amount would not matter; a large loan that goes unpaid could be very stressful and could divide a friendship. One should contemplate how one would feel if the loan is not returned and if there are other priorities for that money. Also, how reliable or committed is the friend? It can be a very tricky situation.

Friends conveniently 'forget' to pay you back.

If you have enough money to lend. To me that means you have enough money to buy him a gift. So if you have the money to buy him this gift. Why don't you just give him this money as a gift, and not expect it back? I am not saying you should do that all the time. But if he happens to be in danger of being thrown out of his appartment, because he doesn't have the money to pay the rent. They why don't you pay it for him at this point, so you can save him from all this trouble? If you really have the money that is.

once no - twice yes

I have this agreement with the bank..... I don't loan money and they don't sleep with my girlfriend.

close friends lean on and depend on each other, so if the loan will save them from real trouble, if you can, then you should. But you have to balance it against your own needs, and those of your family and other friends. One thing that is important to understand: it is never a guarantee that they can pay you back, if that was a sure thing, they wouldn't need the loan to begin with. What really damages friendships though, is when it becomes clear to the loaner that their friend COULD pay back the loan, but that they've chosen to make paying it back a low priority. If you suspect that someone who you otherwise find to be a good person might fall into that category of borrower, I would only loan them money if it is super critical (like they might get evicted, lose their house, have the power turned off, etc), because the dead-beat type is the dead-beat type, no matter who they are dealing with, and for something less critical (like money to get a gift or go out on a date etc), there is less chance of it hurting the friendship for you to make an excuse, then for them to keep not paying you.

I'm all right Jack, keep your hands off of my stack.