The economic situation right now means that many families are leaning on each other for financial support, whether that means sharing living quarters, providing childcare or lending money.

And, if you’ve been in the position to either ask or be asked for a loan from a loved one, you’ve probably realized how sticky a situation it can be.

Luckily, loans between family members don’t have to be relationship-wreckers. Read on for some ideas about smart ways (some adapted from this post on WalletPop.com) to help your friends and family financially.

Act Like the Personal Loan Pros

When giving a loan to someone you like or love, take cues from professional lenders so that both parties are clear about the terms of a loan from the beginning. This could mean:

• Writing a contract for both parties to sign. Be sure to include interest rates, payment due dates and an expected repayment schedule.
• Making it official. The web site VirginMoneyUS.com provides an online venue where family members can document and keep track of loans.
• Eliminating “favorites.” If parents offer one child with a personal loan , other children may feel slighted. Keeping things formal can help diffuse uncomfortable situations.

Having official documentation makes it easier to collect – and repay – money without awkwardness. It may also prevent lenders from feeling pressured into going after “a few more bucks” here and there.

But Remember Everyone’s Family

One of the upsides of a family loan is that it can be much more flexible than one through a bank. If a borrower encounters unexpected financial difficulty, like a layoff or a major illness, lenders should not feel obligated to enforce a difficult payment schedule.

Naturally, excusing a loan is always a judgment call: if a borrower is responsible and works hard but genuinely meets unforeseen obstacles, forgiving all or part of a loan may make sense.

Don’t Play the Shame Game With Loans

Family loans – especially between parents and adult offspring – can be uncomfortable because they come with a certain stigma. Parents might worry that they didn’t guide their children to appropriate financial behavior, and children can feel guilty for not being able to make it on their own.

As long as parents aren’t enabling children to form bad debt habits and children aren’t turning to parents for easy money you shouldn’t feel excessively guilty about the situation. Use the unpleasant emotion as motivation to commit to increased financial responsibility in the future and move on.

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