Getting hit up for a loan can make you feel like you're stepping into a minefield. In today's economy, it's easy to understand how someone can find themselves in a dark place financially. On the one hand, you want to help out a loved one who's in need.

On the other hand, you've heard the stories about loans gone wrong, with friendships ruined and families torn apart. Also, you may be depleting funds that you might need yourself, says Irene S. Levine, PhD, psychologist, author and producer of TheFriendshipBlog.com. Even if you're sure that the asker will pay you back, it's hard to know if you should proceed.