Loaned money to a family member. Could do with some advice.

Sallywag37

I loaned an extended family member 50K in a series of loans between the summer of 2017 and the summer of the following year. He was about to hit the wall financially so I offered him the money to tide him over till things got better for him. They got dramatically better and he's been doing much better for a few years now. He gave me twenty grand back before Christmas so I could sort out my tax and I told him I need the other thirty back pronto. He's arranged to give it to me and it should be arriving in the coming days. The thing is that, rightly or wrongly, I'm feeling a bit resentful about the situation. I made the first instalment of the loan five and a half years ago (and that was the largest instalment by far) so what I'm thinking is, I could have done a lot more with fifty grand over five years ago than I could do with it today.

Is it really reasonable of him to just give me fifty grand back as if over half a decade hadn't passed by? He works in finance so he's very well aware of the reality of inflation etc. I care a lot more about my relationships than I do about money, which is why I haven't put the hammers on him before now. I've been thinking about this lately though and I wonder if my allowing him to behave as if fifty grand today is the same as fifty grand in 2017 won't damage the relationship anyway. I can't come up with the answers to these questions and would really appreciate some objective advice.

Should I ask him for interest in line with inflation? What would that sum be anyway, or how to find it out? Am I being mean spirited? Is he taking the piss?

Thank you in advance.

elperello

It's very possible that you aren't being mean spirited and he isn't taking the p.

You may be just having second thoughts too late and he thinks you were very good to him and is grateful.

You gave him the loan and he is paying it back so there is no breach of trust.

Hard to say how you can resolve this to a situation where you get a few euros extra.

Maybe he will make some gesture, failing that you could open a dialogue.

It's a delicate position to be in if you want to remain on good terms.

https://www.boards.ie/discussion/comment/120122125#Comment_120122125

He offered interest but you never formalised it. I would not pursue it now.

Quite often, somebody who has run into financial quicksand and asked/hinted for a loan is not the type to be very scrupulous about repayment. Their primary concern is likely to be mé féin, you, the lender, are merely a bank. It never feels good.

Jim_Hodge

No you really couldn't now ask for interest. A family load with no agreement on repayment, duration, or interest is just that, a family loan.

MrMusician18

To be honest, when it comes to loaning family and friends money you're lucky to be getting the principal back at all.

If it were sitting in a bank account, you'd be looking at missing out on 0.1% interest. Forget about inflation - that's the missed return.

Sallywag37

He did mention in our opening conversation that he'd sort me out with interest when he could get the money back Jim_Hodge, but we didn't agree an amount of interest or a duration of the loan, because we didn't know then how long it'd take him to get back on his feet. That's part of why I'm feeling resentful, because he just seems to have forgotten about that part of the conversation and I don't know if that's by convenience or because he genuinely forgets, which he could well do after several years.

Spanish Eyes

If you did not have any legal arrangement or similar re the loan, TBH I'd be very glad to be getting it back at all! I thought you were going to say he was dithering and paying you in dribs and drabs and he might never repay you the entire sum.

Get the money back first. Then if you feel like it you could say something to him, but make sure the money is in your fist before doing anything. I can see where your irritation is coming from, but it's probably not worth it in the long run to push the issue now. Are you prepared to fall out over this? If you don't mind, go ahead (after getting the money back though).

Allinall

If you had €50k on deposit since 2017, how much interest do you think you would have got?

You didn’t agree anything with the loan, so be thankful you’ll receive it all back, and move on.

He’s your brother, not someone who borrows in desperation off a loan shark.

Augme

Asking for interest in line with inflation after the fact is pretty outrageous tbh. Put yourself in their position, why would they agree to that now?

YellowLead

I’m sorry but you were the one who gave the loan without proper agreements. It’s more your fault than it is his you are unhappy 🤷🏻‍♀️

FoxForce5

When he gives back the balance wait a week and ask him for a 50k loan. If he says no, well...

Sallywag37

You've missed my second post Augme, he offered interest from the start.

I think you have a point elperello, I care more about the relationship than a few bob in interest.

TheW1zard

Just get your 50 back

Jim_Hodge

Ask him for the €27.24 interest due and pay Revenue the 33% DIRT due. After all €17.98 is €17.98.

You should tell him that you could have bought bitcoin with that 50k and therefore he owes you basically his whole house and a chunk of his kids future earnings.

https://www.boards.ie/discussion/comment/120122056#Comment_120122056

OP could have got something more significant with a State Savings Bond. Nowhere did OP say he was a brother, he said he’s an extended family member.

Jim_Hodge

https://www.boards.ie/discussion/comment/120122157#Comment_120122157

He also could have invested in shares that bombed. Opportunity cost doesn't come in to it when you make a condition free, non specific loan to a family member.

spakman

You're being ridiculous

Shauna677

You are very very fortunate to be getting your money back. Many never receive a cent back.

Allinall

https://www.boards.ie/discussion/comment/120122157#Comment_120122157

If the OP wanted a return on the €50k,they should have invested it somewhere that offered a potential return.

They instead helped out a family member, which did not offer a return.

Sallywag37

He did offer a return Allinall, but I've made that point twice already so won't repeat it again.

As others have said, if interest wasn’t specified at outset I wouldn’t go looking for it in retrospect. What OP wants, I think, as much as anything, is an acknowledgement that the loan was appreciated and took the extended family member out of a bad situation. Would this be the nub of it?

If you don’t want to fall out, maybe best type of thing to say is along the lines of “thank you for the repayment in full, and I’m glad you now find yourself in a much better situation, it was really good being able to help you at such a critical time”. In response you might get some expression of appreciation.

Count Dracula

It was nice of you to help out what sounds like maybe a sibling in law? Not sure.

To be frank you are very lucky to be getting back a penny. In my experience lending money to family has been a nightmare. It rarely works out well either way.

Given that it has taken you so long to have such an issue with it, I get the opinion that this is now very much your problem? You have gone from being a lifesaver to being a thorn in someone else's side. That is the real problem I have with sorting out relations who are shight with money, they rarely feedback the respect you deserve for your assistance. There is also the related idiom that your debt has now created between you both, it is like the loaner now becomes the bad guy overnight, I really hate that shight, but it becomes that.

Whenever I give money to people I care about i always never expect to get it back, most people who need it are crap with it for starters?Don't let it get to you, money is a chunt of a thing that gets in the way of everyone's life, the last thing you need is it disrupting relationships within your own family, it is simply not worth it.

oceanman

https://www.boards.ie/discussion/comment/120122239#Comment_120122239

true...never loan money to family or friends.

Jim_Hodge

https://www.boards.ie/discussion/comment/120122302#Comment_120122302

Or...loan money to family or friends but don't expect to always get repaid.

Sallywag37

https://www.boards.ie/discussion/comment/120122294#Comment_120122294

You've a point there Count Dracula. There's an old saying I'll be paying more attention to in future - "Neither a borrower nor a lender be."

Cat2022

I bet the family member remembers the initial conversation about interest and is hoping you don't bring it up. He works in Finance, he knows what he is doing

Sallywag37

https://www.boards.ie/discussion/comment/120122315#Comment_120122315

That's exactly why I'm resentful.

Brid Hegarty

https://www.boards.ie/discussion/comment/120122332#Comment_120122332

And since things got 'dramatically' better, do you think he could've gotten you this money back in say 2019 or 2020 if he had wanted to? Did you have to hound him for that 20k he gave you before Christmas, or did he offer it? He must have seemed like a pretty honourable guy for you to trust him in the first place???!

Big Bag of Chips

If it's really bothering you then just say it. You offered help at a time when they needed it but now obviously feel you've been taken advantage of. I wouldn't ever expect interest from a family loan. If the borrower was going to pay interest they'd have been better off just going to a bank/credit union.

The fact that you are getting your money back, in full, but still feel resentful means you probably should say something. Most people would be glad to get their €50,000 back, but you feel there should be more acknowledgement. There will already be an atmosphere now anyway as you are feeling resentful of them. So just ask them out straight about interest.. how much are you thinking?

A quick calculation on a credit union site shows a personal loan of €50,000 over 5 years at 11.25% would incur €15,601.92 interest.

Bank of Ireland have a personal loan of €50,000 over 5 years at 6.8% costing €8,788 interest.