Family Loans

Squigs_2

My son got himself into difficulties with a car loan charging 39.9%. I tried to set up a joint loan at our bank for £3k to settle this, at less than 1/2 the interest rate, which was declined because of my son's history. My credit is very good and have no debts, so was very surprised, disappointed and not a little miffed. He now realises how foolish he's been, I wanted to help him sort out his finances and become a 'responsible' borrower. I thought the formality & presence of a bank would have been useful, but would ensure it got paid, effectively supervising him, over 2-years. Are there any other options for this, or his he doomed to repay at ridicoulous rates?

Apples2

The last thing you want to do is form a financial link between the two of you. As you have discovered, his credit rating will simply drag yours own down to his level.

His is stuffed, the only option is for you to take a loan in your own name and give him the cash to settle his agreement. He then repays you.

NEVER act as guarantor for him, the above is the only way you can stay in control.

If he is failing to make payments against his loan, he is unlikely to maintain payments to you so think long and hard about it.