Certainly you ought to ask those difficult questions; it is in your own interest to do so. I have loaned and gifted money but only after the opportunity to see the entire picture. You still have to be very careful. Never co-sign a loan. If the bank won't finance the friend why should you put your own neck on the line?

I choose mostly instead to help out in other ways. This backfired on me once however and my acquaintance showed her true motives and colours. She was always on about being strapped financially. I had my own difficulties then but chose to help anyway. When I arrived with a load of groceries she got on me about how useless that was and how I should have given her the cash. Hmmmm? Alarm bells sounded. I chose to have nothing to do with her again.

Don't just ask about their sources of income but get to the bottom of what they spend it on. Perhaps the true help you might have to give is that of aiding them form a budget or savings plan.