Lend to my son

Sncjw

What if something happens in the future and you don!!!8217;t have the money because of giving it to your son. Then if he doesn!!!8217;t pay each month you could struggle to pay for things. It!!!8217;s not just your son it will affect its you also.

He should get on the debt free wannabe board if he really wants to pay these debts off.

[Deleted User]

Family + Money = A recipe for disaster, harsh but true we have seen so many examples on here in the past, rarely though for as much as 30k.

Dobbibill

OP - Your heart will always want to help your son.

There are plenty of posters all over these boards who thought their son/daughter/family member would definitely pay them back and it wouldn't change their relationship but it does.

A consolidation loan, which is what this is, won't help.
A SOA on the DFW board will or overpaying the lending he currently has to be rid sooner.

Support him emotionally but enjoy your money and retirement.

System

SunnySeagull wrote: »

I have considered the likelihood of him defaulting on the repayments and if I'm honest do consider it low - he has never missed a payment yet,

The difference is he is paying companies where he knows that if he doesn't comply with the agreement they will pursue him for the money, will take him to court, will take action against him which could see him lose stuff he owns or have money taken out of his wages.

Lending from parents falls over because they don't really expect you to take them to court for the money if they don't repay so there's no consequences for not keeping up to the agreement. Think of all the times over the years from when he was a kid he asked you if he could borrow some money and how many times he's paid you back. I would expect the answer, in line with most parents experience to be he asked a lot and never repaid it - as a parent you tend not to expect them to.

And whilst now you may think that if they don't it won't be the end of the world it is different at the time because they will have broken your trust. What will make it even worse is whilst they're claiming they can't pay you you'll be sat there knowing that weekend they're going for a night out or that week they're on holiday with money they claim not to have or them turning up in a new car instead of repaying you. Nothing causes families to fall apart as much as money.

AnotherJoe

Pay off his largest % rate debt or two and tell him when he's paid you back those at your 3%, you'll pay the next largest ones off, and so on.

That way you keep a certain element of control over most of the money it seems you will need later, he has an incentive to pay you back as quickly as possible*. If you pay the whole amount off at the start, you dont have that ability and he doesn't have that incentive.

EDIT; And you might want to reconsider if you really want to charge him interest.


* if he can pay you back even quicker and reduce how much interest, so much the better

Fireflyaway

If this were me, I'd either pay off my child's debt as a gift and not expect the money back of i wouldn't give them anything apart from emotional support. I know your deal is better than a bank loan but personally I'd feel uncomfortable about charging interest. That's profiting off your sons misfortune.
I think loans to family and friends are also dangerous because it creates a debtor / creditor relationship. If your son lost his income and couldn't pay he would feel terrible. If he just stopped paying, you would feel terrible. I got in debt with the bank. Did I care? No. But your son and your relationship could change forever if this went wrong.
Helping your son emotionally is better. Be there for a chat. Cook him dinner or go for a walk or coffee. Money can't buy that.
My husband and his brother fell out over money and haven't spoken in 3 years. No loss for us but I feel sorry for their mum. Don't risk it.

redpete

Wizardly18 wrote: »

One and only piece of advice, do not lend money to your son.

Do not lend money in fact to any family member, it will end it tears.
They could find they can't pay you back, you'll be left without any of the money and it'll ruin the relationship between you.

Many have made the mistake before, and many more will.

and many have helped out family members like this, saved them the pain of fees and interest, helped them get on an even keel and got the money back. Or they have received agreed payment and at some point decided to wipe out the debt (treat it as a gift) without falling out.

Money is, the route of evil

or, more accurately, the love of money is the root of all evil (1 Timothy 6:10).

Silver_Queen

I think it ultimately boils down to your son's character, something that only you will really know. The risk, as everyone else has pointed out, is that he won't pay it back. But only you will have a good idea of whether he is likely to pay it back or no, and proceed with caution.

For example, my parents lent me over £15k to pay for a postgrad qualification and I'm paying it back (albeit slowly). I do not intend to run away with the money and will be paying back every penny no matter what - but there are lots of horror stories on this forum of family members defaulting on family loans.

iolanthe07

I helped both my children out by giving them each a large sum of money at Christmas, with no strings. I trust them to spend it wisely; wanting repayment might damage our relationship.

Malthusian

redpete wrote: »

or, more accurately, the love of money is the root of all evil (1 Timothy 6:10).

1 Timothy 2:12 - But I suffer not a woman to teach, nor to usurp authority over the man, but to be in silence. For Adam was first formed, then Eve. And Adam was not deceived, but the woman being deceived was in the transgression. Notwithstanding she shall be saved in childbearing, if they continue in faith and charity and holiness with sobriety.

Carries about as much moral weight as the bit about money.

SunnySeagull wrote: »

In fairness to him his financial problems began following a rather messy divorce

Do you mean he used to be £60,000 in debt but then got divorced?

Divorce typically means you split the assets of the marriage. You may lose some of what was "yours" (although of course it wasn't "yours", it belonged to two people). It doesn't in itself mean you get into debt.