I usually make it a rule not to lend money because
1. I probably won't get it back
2. I don't have enough money to be lending it out anyway
Reasons not to lend to people:
When they want to buy a pack of cigarettes or money for drugs. An acquaintance who lived in the same apartment building as I did asked me for $25 because it was his last night to get high before the drug test he knew he would fail. I feel really awkward every time someone asks me for money but for that I was like "I'm not in a position financially to be lending money right now, sorry you're on your own." Like I would ever lend to a junkie anyway...
Sometimes I will loan small amounts of money to people who I know have a consistent job and will pay me back. The last time I lent someone money was when one of my friends went to the pharmacy and she didn't have the $17 for her medication. because She was almost deathly low on iron and and she was standing outside Walgreens bawling her eyes out. I didn't have a lot of money to spare at that point either but I felt sooo bad for her and I just said "Look. Come on, calm down. Take this $20 and go inside and pay. Don't worry about it, just pay me back whenever you can." That was something I felt obligated to do and I didn't feel bad at all for lending her for that. Hell, I didn't even really care if she paid me back.