Borrowing money from a friend or relative

[redduck]

Yes. Out of convenience and not actual need... We've been a family that helped each other out from time to time, but everyone in that circle has there financial stuff together and they have been more of a float than a loan. No one in the family likes paying interest.

That's pretty much how we've done it. Has always worked out well. I don't know what a float is, but that term sounds right.

 

[YVRRocketSurgery]

When I was 20'ish and in university, my friend and I attended a Subway franchising seminar. This was early glory days of their expansion in the early 90's and they were the fastest growing franchise operation in North America. Start up costs were around $150k'ish and my friend and I only had like less than $20k. I floated the idea to my family to see if they would help financially support get a Subway franchise. The idea didn't gain traction among my family so that was that.

 

[Sue J]

I was in college and my sister had just gotten married. They were broke and wanted to move to NY to be closer to BIL family. She asked for a loan of $250. She had a history of money "issues" and I am a natural saver from childhood. I loaned it to her and they moved. It took a few months before they paid it back.

She is now married to husband #2 and conveniently he had plenty when they got married and now they have more than they could ever spend.

She has not forgotten that it was little old me (the frugal kid sister) who helped her out when she asked.

 

[tb001]

Borrowed money from my father for my first car after college. My credit report wasn't great and they were going to charge me 14% interest instead of the 6% that was the standard rate. When I told my dad, he offered to loan me the money at 8%. Never missed a payment.

I loaned a good friend several hundred dollars when I was in grad school. We were both totally broke, so a lot of money at the time. I told her not to worry about paying me back until it was easy for her. Never thought twice about it and considered it a gift. Her future husband stuck twice the money in my suitcase several years later when I was visiting them.

In general, I don't loan money. If I do, I always consider it a gift in my head.

 

[RenoJay]

When I was a young adult I borrowed for a house down payment from parents. More recently I’ve lent to friends and relatives. Overall I’ve always gotten paid back, but it’s always uncomfortable and I hope not to be their lender in the future.

 

[Dreamer]

No. I would not have had anybody to ask and would have been to proud to ask even if there would have been someone.

 

[marko]

Here's the closest I ever got in the form of a loan from family:
It was 45 years ago but it was so unusual I remember it to this day.

I was 18 and had just bought a brand new VW Beetle for $1904. The dealer lived a few streets over so he drove the car over to my house. I handed him an envelope of $100's but after all the paperwork and fees, I was short 85 cents. I was stumped!

Dad was standing there in the kitchen and....reached into his pocket, counted it out and gave the guy the extra 85 cents.

And, no, I never paid him back either! So I guess I was a bad son.

 

[calmloki]

When I was maybe 11 years old there was going to be a big livestock auction. My folks were jonesing for Herefords and I had $135 from berry picking. Lent it to them and later got a Hereford calf as payment. It grazed on their land and ate their hay and when it sold I made money! Hmm. Since then I've made a very few loans to family members - helped pay a divorce lawyer once and was repaid in a few years. Mostly my family doesn't ask for or need loans from me. On the other hand, I've been happy to make some substantial loans to a few friends. Thing is, I trust them and admire the way they conduct their lives. I ask that they keep the loans silent and don't talk about them. I view it as backing their play, but as a silent backer. Things would have to go very badly for my friends not to pay us back - so badly that I think I'd lose the money with equanimity.
Some personal loans to others didn't pay back - eh - one was a caregiver to MIL and I just view it as a well earned gratuity, another the guy's life went downhill fast - no point pecking at him, just let it go.
Mostly though I'm a first mortgage kinda guy - I want my borrowers to succeed and make a lot of money, I want them to pay me interest as agreed, but if things go badly I'm foreclosing and have a property to market.

 

[pb4uski]

As an adult (define this however you want) have you ever borrowed or thought of borrowing a large sum of money (define this however you want) from a friend or relative?

No, that's what banks are for.

About 15 years ago, I loaned $3000 to a friend so that he could get divorced and get rid of that gold digger, cheating wife of his (DW's cousin who we had warned him about to no avail).
He paid me back within a year.

That is the best money that he's ever spent, and the best loan that I ever made.

 

[jollystomper]

I have it done it. Maybe I am too prideful, but I could never see myself borrowing money from a friend or relative, it would feel like a heavy weight on me. I would rather get another job/paying task if I needed additional money. That I have done, instead of borrowing.

 

[Gumby]

I would sleep under a bridge before I would borrow money from my family. I have been 100% self-supporting since the day I left home three weeks after my high school graduation, and I like it that way.

 

[MarieIG]

When DH and I bought our house, my DF gave us some money. DM, who had recently inherited a little money from my DGM, said she wanted to loan us 10k from her own money. Then, when I tried to pay her, she refused to take it back!

I recall one time when we (after we were married DH and I) were living with my parents while I was in law school. I had about 10k in DF's closet for tuition. He asked me if he could borrow it for taxes and I said sure. Didn't think about it again until it was time to may the next tuition payment and he gave me a check. If I didn't have to make a tuition payment, I would not have mentioned it. DF gave A LOT to my family. I had to put the brakes on his generosity a few times.

With kids I tend to gift, not loan. Although my oldest did call from the vet's office for an emergency "loan." Never saw that $ again, although the rest of my kiddos are pretty responsible financially.

 

[cyber888]

Never borrowed. Friends borrowed from me.

 

[RetireAge50]

My parents paid for some of my college. I knew they could not afford it so I paid them back shortly after graduating.

 

[unclemick]

As an adult (define this however you want) have you ever borrowed or thought of borrowing a large sum of money (define this however you want) from a friend or relative?

No.

heh heh heh - And when the money went the other direction aka borrowed from me I mentally in mind treated it as no expectation of return. Saved myself a lot of grief over the decades.

 

[tinlizzy]

I couldn't get a loan after my divorce and borrowed $6000 from my step-father for a car. No interest and we set up a payment schedule.

 

[UpAnchor]

At age 24 I was going through a rough patch. I asked and my dad loaned me $800. It took awhile but I paid him back with interest of some long-forgotten amount. It wasn't my last rough patch, as I was a bit slow in maturing. But it was the last time I ever allowed myself to ask for financial help, even short-term, from a family member. And I never did so from a friend.

 

[harley]

I see a lot of you acting as if receiving help from a relative is moral weakness. While I would never ask for a loan or gift of money, being able to loan or give the gift to a loved one is a really nice feeling. Helping people you care for get a step up doesn't indicate that they are less than. And it doesn't mean they couldn't do fine on their own. I appreciate the consideration I was given by family members and have enjoyed paying it forward to future generations. If others haven't had that advantage for whatever reason, that's the way it goes. But I don't think it indicates weakness or strength either way.

 

[Sunset]

I have done it twice, both times to buy real estate, both times with a written agreement on interest, etc.

I paid them both back.

It was opportunity knocking, and I didn't have the actual cash or enough cash to do the deal.

 

[Cayman]

I see a lot of you acting as if receiving help from a relative is moral weakness. While I would never ask for a loan or gift of money, being able to loan or give the gift to a loved one is a really nice feeling. Helping people you care for get a step up doesn't indicate that they are less than. And it doesn't mean they couldn't do fine on their own. I appreciate the consideration I was given by family members and have enjoyed paying it forward to future generations. If others haven't had that advantage for whatever reason, that's the way it goes. But I don't think it indicates weakness or strength either way.

Well said, and my thoughts also.

Years ago, a college loan would have been so helpful, but I never asked my wealthy family for a loan because the values that Harley writes above are alien to my family. Their attitude is "Do it yourself and too bad if you can't!" DH and I are not like that, thankfully! We feel good when we are generous.

 

[Bigdawg]

I see a lot of you acting as if receiving help from a relative is moral weakness. While I would never ask for a loan or gift of money, being able to loan or give the gift to a loved one is a really nice feeling. Helping people you care for get a step up doesn't indicate that they are less than. And it doesn't mean they couldn't do fine on their own. I appreciate the consideration I was given by family members and have enjoyed paying it forward to future generations. If others haven't had that advantage for whatever reason, that's the way it goes. But I don't think it indicates weakness or strength either way.

Yes, but... You have to be able to judge the person you would be lending money to. If they have a good track record then yes. I would never just blindly lend money to a friend or relative. To be a friend of mine in the present you have to be a responsible person. The vast majority of my current friends yes I would lend to. Family is a different story. Many on my side of the family are not very reliable or successful in life. Numerous bad life decisions. I would never lend to them. As a matter of fact I just sold a golf course townhouse on contract for deed because I am afraid my DS(dead beat sister) will ask to move into it. Her house is completely falling down. I would love to have kept the property but I just want to avoid the potential conflict. The property is near her and far from me. Oh well.

A down and out close life long friend was basically living in his car in SoCal. He asked for $1000. I gave it. About 10 years later he gave me a check for $1150. He is back on his feet and doing well.

 

[nativenewenglander]

Yes, I borrowed $45K from my parents in 1983 @13% for my first house. We had a lawyer write up the papers, I paid it off within two years. I wish I had stayed in that house as I would have retired by 40. I loaned money to many friends over the years that wanted to buy houses and start businesses, very risky, but I had been very fortunate and wanted to help them.

 

[bingybear]

we borrowed $9k in grad school from my in laws at I think 8% for a down payment on a house. We paid it back in a year which I think blew their mind. The house was a loan assumption. I doubt we would qualify for a new loan at the time.

 

[Tallman4123]

I'm fortunate that I have never been in a position where I needed to borrow money from a friend or relative.

Our niece came to us earlier this year and asked for a $5k loan to get her (and her 2 yr old daughter) out of an abusive marriage and into a stable environment. We quickly agreed and though she insists she will pay us back, we did not set any terms of repayment. She's since separated from her husband and the divorce proceedings are underway. I'll certainly let her pay us back if she's able because I know it will be a matter of pride for her. If she can't, it'll be one of the best gifts we ever provided. Although it was unsaid, I know she didn't ask her parents for the money because they wouldn't have let her forget it.

I must admit however, I blanched a little bit when I heard that earlier this month she rented a hall and invited 40 or so of her friends to a birthday party for her two year old daughter!!

 

[pj.mask]

Tried to borrow money for college but my parents wouldn’t loan me anything. They gave me a few thousand though. I paid off my college loans with my signing bonus 4 years later (and summer earnings)