8. The obligation of lending applies whether it is extended against collateral or without collateral – if the borrower is indeed trustworthy in the eyes of the lender. However, where the loan is given without any collateral (and even though the lender trusts the borrower), he should only give the loan in the presence of witnesses or else the borrower should give a document signed by a witness or by the lender himself. This is necessary lest the lender forgets taking the loan and denies it.
9. If the would-be lender knows that the borrower is of bad character who is careless with other people’s money, so that the money will be spent and there will be nothing left to collect – it is better to not give the loan altogether than to give the loan and then be forced to demand the [non-existent] money and risk violatingHe shall not press his fellow(Devarim15:2). A lender who behaves this way, is deemed arasha (wicked person).
