To ask SIL to sign a loan agreement?

[SILNeedsaCar]

Background...

SIL and I have never got on very well. However recently we have been getting on better.

SIL earns around £50k a year, pays £400 a month rent, but is always skint.

My partner and I have been saving for a house, have £14k sat in the bank but will not be able to get a mortgage until at least May, as that is when our credit will be repaired.

I NEVER lend money to or borrow money from anyone. I don't even have a credit card these days!

Current situation...
Last week, SILs car failed its MOT. It needs £800 worth of work doing. It is worth £400 if she has it repaired. DP offered to lend her £1000 over 3 months, which she accepted.

Yesterday, SIL came back to DP stating she has found a 4x4 she wants to buy, which will cost £2000, and she wants to borrow the entire amount.

My reaction to DP was "woah! That's a lot of money, don't really feel comfortable with that!" Then I had a think and agreed to it, provided we had a written loan agreement, with repayments of £400 a month, and car in our name with spare key until the loan is paid off, due to her poor money management and needing to protect our finances. DP said this would be a good idea, and we went to bed, thinking no more of it.

I've just had SIL ring me swearing at me, shouting down the phone that I'm a vile bitch for daring to ask for a written agreement! Clearly I'm not going to lend her the money now! But my question is...

WIBU to ask for a signed loan agreement in the first place? Was it a step too far?

Maybe it's not that much of a stretch? I was minuting a Board of Governors meeting and the head teacher in question was on £60k? I was only questioning if she exaggerated as wouldn't like to think she was spending it on drugs due to her job...

Of course deputy heads can be on 50k a year.
Op hasn't given the location or type of school.

Wouldn't lend her a fiver never mind cash or a quad. She might flog the quad to go towards her car find after all she deserves it.

SIL definitely holds the role she claims she does (is named on school website) and for the area £50k seems right.

If a bank refuses to loan her 2k then you would be a fool to. As for wrecking the family; if it happens, is entirely her responsibility. She made the outrageous request and then became abusive when she couldn't get what she wanted.

Deputys are on 60k at my school and the head is on 110k. So definitely feasible.
She has some serious money issues. Steer well clear!

Always find banks are quite willing to lend to teachers as feel job is secure. She must have big debts with them or 2000 should be easy to get.