Loan from my parents - payback ideas

2bak860

Hi,

I currently owe my parents around £25k and am currently paying £100 back per month. At that rate it's going to take about 20 years - so I'd like to up it when I can.

It seems to be a bit of a "bone of contention" - they gave it to me in good faith and I am paying it back, but it just seems like it casts a shadow over every conversation or time I spend with them.

Any money savers had experience of this? I have often thought - oh, swap it for a bank loan, but I think this would cause even greater anxiety from my parents - they helped me out so I wouldn't be in the hands of the banks.

Any ideas/encouragement/experiences would be useful - thanks!

ltrent

Cant offer ant practical advice, but other than to tell them how you feel, they may be thinking the same as you and are actually more than happy that you borrowed the money from them.

Mrs_Soup

What was the agreed plan for repayment when you borrowed it? Are you paying any interest? What did you do with the money? I ask because my husband was lent a sum by his parents for downpayment on a house and it was agreed that he would return them a percentage of the profits when it sold but he did not repay in the meantime - this worked out well for them as they saw an increase in their investment due to increased house value.

[Deleted User]

How about if you showed that you were going to gradually increase repayments? Show that you are 'invested' in paying it back

2bak860

Thanks Mrs Soup,

The main amount of money was a house deposit to pay back at an agreed rate (including interest). It was understood that if we sold the house, they would get their investment back. Unfortunately we sold at a loss and they got only a percentage back, so since then, I have continued to pay the remainder.

We are now buying a new house, and like I say, still paying back.

2bak860

Thanks Ringo,

Yes - a forecast could be good. We're doing everything we can to reduce our outgoings and I'm trying to get work on the side. Starting next year we're not doing "the big holiday" but a couple of smaller trips (which seem to be much easier to organise!). Yes, mortgage payments will work out bigger than current rent, but we're economising elsewhere.

2bak860

Thanks Itrent - probably what needs to happen. With a payback forecast and a frank discussion could probably help matters.

We all wish we could exist without these things - but that's not the reality for some people eh?

Mojisola

2bak860 wrote: »

The main amount of money was a house deposit to pay back at an agreed rate (including interest). It was understood that if we sold the house, they would get their investment back. Unfortunately we sold at a loss and they got only a percentage back, so since then, I have continued to pay the remainder.

We are now buying a new house, and like I say, still paying back.

2bak860 wrote: »

Yes - a forecast could be good. We're doing everything we can to reduce our outgoings and I'm trying to get work on the side. Starting next year we're not doing "the big holiday" but a couple of smaller trips (which seem to be much easier to organise!). Yes, mortgage payments will work out bigger than current rent, but we're economising elsewhere.

If I had loaned money to someone and not had it back as agreed (after the house sale) and saw them still going on big holidays, buying a new house (wouldn't your deposit money have gone a long way to paying off the debt?), etc, I wouldn't be very happy.

Pixie5740

Was it a loan or an investment? If you had sold the property for a profit would that have expected a percentage of that profit as a return on their investment? If it was an investment rather than a loan then it's tough titties as investments can go up as well as down.

However, if it was a loan then I agree with Mojisola then I'd be annoyed at someone who owed me £25,000 going away on "big holidays" and not cutting back more to pay back the money quicker.

2bak860

Hi Mojisola,

I think this is the main issue, so in my mind, I'm going to pay back the loan asap (ideally within 5 years). It is tricky to enjoy the weekends, short low-budget breaks and sometimes going out for a meal (but not often!) and still communicate that we're not sitting on a pile of cash - we're paying back but enjoying life as best we can.

2bak860

Thanks Pixie,

Yes, it is a loan. I'm cutting back as much as I can. I give my family one 7-day holiday a year (is that allowed?) - and I'm not a big spender in nature. Yes I need to increase payments.