Hi I am a newbie here and I want to ask whether it is safe for me to lend bitcoins to others.
There is always a risk of default, that's why you only give out loans when the user can provide adequate collateral.
I have around $0.007 btc earned from faucets,etc.
Are you talking about $0.007 or 0.007 BTC? If the case is with the former, then this amount is economically unspendable due to fees. Even if it is the latter, lending out ~8$ won't get you far.