Lending money to an adult child

mildredalien

It depends how trustworthy and capable you think your child is. I've loaned money from my parents before to buy a car, and verbally agreed how much I would repay per month and how long this would last, immediately set up a standing order and kept to it. Neither of us felt any need to write anything down formally or get into interest rates etc. as we both knew I was able and willing to pay. I think my parents didn't ask for interest as the amounts were negligible given the current bank rates, although they would have been well within their rights to and I wouldn't have complained

You know your situation better than us (although I'm a bit confused as to whether you are the parent, child or another party given your use of the third person!) and if you want it more formal, I'd definitely go for legal advice. That being said I worked 3 nights a week throughout uni to fund my social life which didn't have any detrimental effect on me or my uni work *shrug*

downsizer3

Well if you want to charge interest it'd be a bit mean to charge any more than a savings account would give. Me? I wouldn't do it unless my child had defaulted in some way on paying something back previously.
I'd write out the amounts and terms of loan with repayment schedule and interest if you must but have it witnessed by a 3rd party for signing - surely thats as official as you need to get with your own child?

[Deleted User]

the simple answer is DONT DO IT,the more complicated answer is DONT even think about doing it

DCFC79

Yorky1 wrote: »

Some more info:

The loans are for two different purposes:

Loan 1- €3300: For duplicate tuition fees after re-starting university a couple of times due to mistaken choices (course wise and partying..)

Loan 2-€700: Extra insurance premium to be insured on parents' car.

The motivation is the adult child is working three nights a week to pay back the loan and the work is taking it's tole - physically & mentally. If the parents offered a lower rate of interest the child could afford to work day shifts instead & perhaps have more of a social life.

The reason for charging interest is moreover to make it a 'real' loan rather than a gift - the child is aged 23.

Whats to stop them from partying too much and concentrate on the course ?

pleasedelete

Gosh. In 1st posting you describe them as dependent yet you want to charge them for insuring the car for them. Most parents wouldn't ask their child for the extra car insurance- its part and parcel of having children.

Did your parents charge you to use their car?

Again with the tuition. I think if most parents could afford it they would pay. Did your parents support you at uni?

Can you really not afford to give these 2 things as gifts if you can afford to loan? A child is for life!

Sorry I know people will disagree but if you can afford it why not just give it? Charging interest and making them pay your insurance just seems an odd thing to me.

orcocan

i personally think it's a complete waste of money to throw hundreds of ££ to solicitors, notaries and the like to lend money to your own child. Do you really not trust each other to just have an agreement between yourselves (even written)? If not then the answer is don't do it. He's not defaulted or anything, if he can cope then it's not really an issue.

Errata

Lend them the money and ensure they pay you back by giving them a good threatening and putting the fear of god into them.

KittenKaboodle

pleasedelete wrote: »

Gosh. In 1st posting you describe them as dependent yet you want to charge them for insuring the car for them. Most parents wouldn't ask their child for the extra car insurance- its part and parcel of having children.

Did your parents charge you to use their car?

Again with the tuition. I think if most parents could afford it they would pay. Did your parents support you at uni?

Can you really not afford to give these 2 things as gifts if you can afford to loan? A child is for life!

Sorry I know people will disagree but if you can afford it why not just give it? Charging interest and making them pay your insurance just seems an odd thing to me.

What a ridiculous post. So, by that token the parent should just keep paying tuition fees no matter how many times the child £&@!s up uni and then decides they want to go back to do a different course?! Gosh indeed. I think the OP is talking about trying to teach the "child" the value of money. Posts like yours explain exactly why we have a generation of young adults who are up to the eyeballs in debt and can barely tie their own shoe laces.

pleasedelete

KittenKaboodle wrote: »

What a ridiculous post. So, by that token the parent should just keep paying tuition fees no matter how many times the child £&@!s up uni and then decides they want to go back to do a different course?! Gosh indeed. I think the OP is talking a out trying to teach the "child" the value of money. Post like yours explain exactly why we have a generation of young adults who are up to the eyeballs in debt and can barely tie their own shoe laces.

Why not be a bit ruder! The point is that people express their opinions. No need to insult them! Mimicking my language is totally unneccessary.

I pointed out in my post that people may disagree. It's my opinion. You may not agree but please please don't be rude or you will soon insult people on here.

Yorky1

Thanks for the many - and diverse - replies. Does anyone know of an accurate online repayment calculator and sample loan agreement which could be used?