Interest on family loan!

Dullville

Hope this is in right section.
Borrowed 15k off my mum about 5 years ago, had a few payment holidays along the way but now have only 2 x payments left( £800)
Obviously going to give me mum extra for the interest she has missed out on by her lending me capital.
So how much has she missed out on by not having this 15k in a high interest account or an ISA.
I know we can't be exact but what would you think would be a reasonable and generous amount to give her.
Thanks in advance.

[Deleted User]

£1500 would be about right,with interest rates as low as 2%(or less)that would be £300 a year interest x 5years,if you wanted to compound the interest i'd add another £500

Dullville

woodbine wrote: »

£1500 would be about right,with interest rates as low as 2%(or less)that would be £300 a year interest x 5years,if you wanted to compound the interest i'd add another £500

Thanks woodbine

Tixy

As an example....
£15k compound interest over 5 years at say 3% would have earned her just short of £3k.

If you had repaid her the £15k equally over 5 years and she had invested the repayment at 3% she would have earned about £1200. So has lost out on about £1800.

That's not to say 3% is the right figure, and at a guess you didn't repay equally over the period, but it might give you a starting point.

Dullville

Tixy wrote: »

As an example....
£15k compound interest over 5 years at say 3% would have earned her just short of £3k.

If you had repaid her the £15k equally over 5 years and she had invested the repayment at 3% she would have earned about £1200. So has lost out on about £1800.

That's not to say 3% is the right figure, and at a guess you didn't repay equally over the period, but it might give you a starting point.

No your right Tixy I was supposed to pay £400 PCM but had a few breaks with the repayments, she's insisting she wants nothing extra on top when I've paid the last 2 instalments but the figure woodbine quoted seems fair enough. Thanks.

andyfromotley

If i lent my children money, (unlikely as they are 13 and 9!!) i would be mortified if they felt that they should pay me interest. I'm not a bank, they are my children.
Your mum has made it clear that she doesn't want interest, hows about a big bunch of flowers, a meal out and a heartfelt thank you telling her how much having the loan helped you?
Don't get me wrong, your intention is great but perhaps unnecessary?

immoral_angeluk

If she's saying she doesn't want anything on top, why don't you treat her instead of thinking about it in a financial way? Maybe take her for a little holiday with the 'interest' instead? I'm sure she'd appreciate that more than a few extra £s.

Dullville

Appreciate your comments everybody and I know exactly where your coming from ref she's my mum and she wouldn't want anything extra back. However this is the 3rd time she has bailed me out due to me being a real tool with money.
Will ask her if she wants anything special and I'm sure she will say no so will just pay her the money whether she likes it or not..

kerri_gt

Is there something she has always wanted to do but hasn't yet? Like seeing a show or going somewhere in particular. I would take her there with the 'interest' I know you want to give her the money, but I bet if she's anything like my mum, she'd treasure the memories of a special day(s) more.

And best thing of all you could give her....don't be a tool with your £ again

rising_from_the_ashes

andyfromotley wrote: »

If i lent my children money, (unlikely as they are 13 and 9!!) i would be mortified if they felt that they should pay me interest. I'm not a bank, they are my children.

Your kids are very lucky then ..... when I was younger and my dad lent me money to buy a car (needed for work & it was my 1st job so no credit history etc) he charged me the same as the bank would've done!

His argument was that I needed to learn about money .... my mum was furious!



Dullville I agree with the others, is there anything that she's always wanted to do / go and just hasn't .... maybe treat her to that.

andyfromotley

Oh i definitely agree with your dads intention just not his application of it. Each to their own of course.