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Family Loan
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My in-laws extended their mortgage some years ago to encompass a £30k loan to help us expand our business. We agreed to pay back a monthly fee until it cleared the loan. We have never missed a payment and have already paid over half back. Now they are wanting the full £30k back and say we have only been paying the interest on it! We have not signed any paperwork and not actually seen what interest rates are on the loan itself which looking back now was pretty dumb. Surely there is no way the interest on an extended mortgage could be over 50%?! They have even been to my parents to ask for the money back which is just crazy as we don't have a very good relationship with my parents as it is!0
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Tabletalk123 said:Surely there is no way the interest on an extended mortgage could be over 50%?!
Time for a family discussion with tea, biscuits and alcohol.0 -
Tabletalk123 said:My in-laws extended their mortgage some years ago to encompass a £30k loan to help us expand our business. We agreed to pay back a monthly fee until it cleared the loan. We have never missed a payment and have already paid over half back. Now they are wanting the full £30k back and say we have only been paying the interest on it! We have not signed any paperwork and not actually seen what interest rates are on the loan itself which looking back now was pretty dumb. Surely there is no way the interest on an extended mortgage could be over 50%?! They have even been to my parents to ask for the money back which is just crazy as we don't have a very good relationship with my parents as it is!0
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Did you agree to even pay interest on the loan? The fact that you have no idea what the interest rate is would indicate that you did not.
If you have an agreement to pay £x per month until it's cleared then that is binding: they can't just demand the balance owing now in one hit.
However, the problem with this type of verbal arrangement, as you are now finding out, is proving what was actually agreed, without any documentation. For a business loan of £30k, it is positively reckless.No free lunch, and no free laptop0 -
I just wonder if the mortgage that the family took out is now on a SVR and they are struggling to re mortgage due to either age or their own financial circumstances?0
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people are not really going to post on here about how they lent their brother £5000 and he paid them back as agreed and took them for a nice meal to say thanks, are they?
It's humourous that this was followed by:Tabletalk123 said:My in-laws extended their mortgage some years ago to encompass a £30k loan to help us expand our business. We agreed to pay back a monthly fee until it cleared the loan. We have never missed a payment and have already paid over half back. Now they are wanting the full £30k back and say we have only been paying the interest on it! We have not signed any paperwork and not actually seen what interest rates are on the loan itself which looking back now was pretty dumb. Surely there is no way the interest on an extended mortgage could be over 50%?! They have even been to my parents to ask for the money back which is just crazy as we don't have a very good relationship with my parents as it is!
To be frank, it's quite shocking that no formal agreement was drawn up for a £30k business loan...
The reason that people recommend people not to lend family money is not because the majority of people don't pay it back (I'd imagine the opposite is true), it's just there's not really much benefits if they do, whereas it causes unparalled family ruin and disaster if they don't. Why risk it? Plus there's the element that people usually only ask family to borrow money if they've exhausted every other channel...
Know what you don't1 -
macman said:Did you agree to even pay interest on the loan? The fact that you have no idea what the interest rate is would indicate that you did not.
If you have an agreement to pay £x per month until it's cleared then that is binding: they can't just demand the balance owing now in one hit.
However, the problem with this type of verbal arrangement, as you are now finding out, is proving what was actually agreed, without any documentation. For a business loan of £30k, it is positively reckless.0 -
Grumpy_chap said:
You say you don't have a very good relationship with your parents, yet your parents were willing to "front" a loan for you and lend £30k - that is quite good going really.0 -
Ergates said:Grumpy_chap said:
You say you don't have a very good relationship with your parents, yet your parents were willing to "front" a loan for you and lend £30k - that is quite good going really.0 -
Ergates said:Grumpy_chap said:
You say you don't have a very good relationship with your parents, yet your parents were willing to "front" a loan for you and lend £30k - that is quite good going really.No free lunch, and no free laptop0
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