What interest rate would you charge your family?

System

Its not making money. Its helping family at no cost to me.

BoGoF

Perhaps your mother should charge you interest on the money she 'invested' in you over the years.

Seems a poor investment on her part mind you, I'm sure she didn't bring you up to behave this way. You have no idea what 'family' means and need to grow up.

vintagegirl

berbastrike wrote: »

Its not making money. Its helping family at no cost to me.

so help her at no cost yourself then if you want to help at all. If it was my mum and i am speaking honestly here and she was truly in dire straits, and needed £10k I would GIVE HER £11K

You wouldnt be here if it wasn't for her

vintagegirl

Mostly ebay trading has helped me build savings. And not buying things I can't afford like new cars, phones, clothes. I have very low expenditure, zero direct debits etc.[/QUOTE]

I take it you don't pay full rent then to your mother or anyone else

KonkyWonky

It would never cross my mind to profit from my family. If my mum was in so much debt I would lend her the money no question.

What you gonna do if she defaults? Send Vinny round her place?

redpete

I think the criticism the OP is receiving is unfair. Looking at it from the other side, the mother would be benefiting (reducing the interest they pay) at a cost to the OP (losing out on interest on their savings). Why is this considered acceptable but if the OP charges some interest it is considered unacceptable?

My decision would depend a lot on the circumstances - how has the debt built up, what relationship they have had over the last years, what the alternatives are.

One possibility is to charge interest equivalent to the rate of inflation. But also consider what might happen if the mother stops paying back and/or builds up debt again. Either accept the possibility that the loan would become a gift, or not help out at all. Anothr possibility is to get your mother to include a clause in her will that the amount owed is paid back out of the estate before any other distribution.

jen245

Your mother carried you, gave birth to you, loved you, nursed you, fed you, clothed you, put a roof over your head, all of which cost way more than £10000. To even consider charging her interest, IMO, is morally wrong.

simongregson

I wouldn't charge my own mother interest. But I wouldn't lend the money if the underlying problem was not addressed. They will run up the debt again in all probability and you won't have any cash to help out the next time.

I would suggest lending less, say 5k. Pay it off the cards yourself. If your mum then pays off the same amount each month to the CC as she currently pays then she will pay down the balance much quicker as the interest will be half, but she will have to be disciplined. You Mum has to take some of the responsibility herself.

Personally, if that worked I wouldn't ask for the 5k back or charge interest on it. The risk is your mum runs up the cards again but there isn't a lot you can do about that. Just be prepared to lose your money either way!

hayton2k3

Wutang wrote: »

I am seriously out of touch....

why should he miss out on the interest he WOULD earn if he never lent her it?

hunsbury0

I would NOT charge anything to my mum.I would give her the 10K & help her to educate herself on budgeting. I would monitor by getting rid of the cards & ask her to pay me a reasonable amount that she can afford, not that I would want her money but more to educate her that she has to budget her income.