Dear Elisabeth:

I think it is perfectly fine for you to change your mind and not to loan her the money she asked for (or any amount). You do not have an ethical obligation to do so.

You had the ethical obligation to pay her back the money she loaned you, and you did that.

Let her know you changed your mind. Do so simply, clearly, respectfully- no need to get into unnecessary details, you don’t have to give her reasons for choosing to not loan her money, no need to be apologetic for your decision to not loan her money. (a short apology for giving her the first Yes will do).

anita