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

Victor · 18-01-2023 1:50am

Get the €30,000 back first, in case talk of interest causes ... slowness.

The Consumer Price Index from December 2017 to December 2022 increase about 11.5%, with most of that happening in 2022. https://www.cso.ie/en/releasesandpublications/ep/p-cpi/consumerpriceindexdecember2022/

Money in an investment account would have, hopefully earned substantially more than that.

Sallywag37 · 18-01-2023 2:11am

https://www.boards.ie/discussion/comment/120123071#Comment_120123071

That's a good question. I suppose I just found the conversation difficult.

Strumms · 18-01-2023 2:42am

You loaned him the money interest free for all intents and purposes. How can he be taking the piss ? he’s paying back as agreed. A sweet deal for him for sure but you can’t change the terms of the agreement now.

it’s not going to be a good look saying..” ok thanks for paying it back but you can add another 2/3 grand, let’s call it interest “

what probably should have happened…a conversation at the second loan request …

” we are getting into serious money now, I’m going to need interest from you to cover my end, the depreciation of value of that cash etc…”

18-01-2023 3:29am

OP might well have otherwise have been planning to or just about to spend it, say, on improving his house (an investment in itself), but then when a family connection in really bad financial trouble manifests, he thought “I have the means, I could help” and forfeited the idea of his own spend. That’s an example of the type of thing OP might have had in mind.

Sometimes it happens that you forfeit something yourself to afford another person a means of easing a situation in their life. There would have been an urgency about the initially situation that prompted the loan, the lender immediately puts the family member/friend first, then when things go somewhat unsatisfactorily, there would be a natural feeling of, at best, being taken for granted.

It is very hard to disguise resentment, it pops to the surface from time to time like in a boiling cauldron, so it has to be dealt with one way or the other. Here, OP’s relative is a person very well-versed in finances, so OP feels “well he, of ALL the people in the world, he ought to know the value of my loan and volunteer something extra”. Maybe because of the borrower’s very immersion in the world of finance he took a bad gamble or two and OP is subconsciously factoring that in too. OP can’t turn back the clock but now feels resentment at being taken for granted, so he must assert himself in whatever way he can that doesn’t also cause a lifelong rift if he wants to keep family relationships in an even keel. That’s extremely tricky.

I know the way my own father would have dealt with something like that, he was an extremely helpful type of man, but like anyone he didn’t like being made a fool of. I can hear him saying something like this “I always want us to get on well and I would like if you would do something for me, the way I helped you back then. I had been going to get a new kitchen (or new windows etc) at that time, but I put that off. Mary’s been saying she’d really like us to get that now, but they’ve gone up in price since then and I can’t as easily stretch to that. Would you be ok about gifting me some of the extra towards it?” Something like that would be assertive but not quite aggressive. The risk is relative might reply that he couldn’t afford to gift any extra, and fair enough if that’s genuine. But it might give him the opportunity of conceding to that, and maybe even gladly so for all you know.

18-01-2023 3:45am

https://www.boards.ie/discussion/comment/120123117#Comment_120123117

He should have volunteered repaying when he was on his feet; it’s quite telling that he didn’t, any fair minded person would do.

blade1 · 18-01-2023 4:21am

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

I say do.

It's a great way of ridding you of leaches.

oceanman · 18-01-2023 7:46am

https://www.boards.ie/discussion/comment/120122885#Comment_120122885

i get that and i do the same myself...but loaning 50k to a friend or family member is...as you say madness.

maninasia · 18-01-2023 8:42am

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

Everybody could have more money in hindsight. In hindsight we are all geniuses.

In the end getting the money back isn't too bad.

And who is to say that 50k didn't go on a bad stock investmment?

Squatman · 18-01-2023 9:13am

Yes. Don't forget, altruistic you, lent money to someone who had to turn their lives around. You made no arrangements for installments, and they have duly turned their lives around and lumped 20k on you. Theres **** all people here with 20k in an account to hand over on a loan or otherwise.

Kurooi · 18-01-2023 9:18am

Interest in line with inflation? Charging a family interest on a loan I understand but only a loan shark would consider rates that high.

You loaned him money you didn't have use for, check the rate on your deposit savings account , probably close to 0.0%, that's how much you as a person get in interest.

Deregos. · 18-01-2023 9:25am

https://www.boards.ie/discussion/2058280112/loaned-money-to-a-family-member-could-do-with-some-advice

You lending him the money was a good thing for you to do, I'm sure he appreciates your help.

You changing the agreement by coming back and looking for interest on top is not a good thing to do.

I reckon if the shoe was on the other foot, and you were the one who'd borrowed the 50k, then during the process of paying it back, the lender turned around to you and started complaining that there was 'nothing in it for them', and that they wanted added interest on top, just to make them feel better about the deal, you'd be on here creating a thread, complaining about your treatment by your extended family member.

And rightly so.

rock22 · 18-01-2023 9:31am

https://www.boards.ie/discussion/comment/120122484#Comment_120122484

So you want to charge your family member much more that a bank would have charged him.

Are you a licenced money lender?

Would it not be illegal for you to charge interest on a loan?

callaway92 · 18-01-2023 9:36am

https://www.boards.ie/discussion/comment/120122882#Comment_120122882

He probably mentioned it in a state of panic. I doubt there was much logic in his thinking if he was 50k deep

MarkR · 18-01-2023 10:07am

Once you get your money back, you can say that we never discussed an interest rate, what do they think would be fair. If they say 0, then it's up to you. Do you want to fight over it?

Goodigal · 18-01-2023 10:53am

I think you should count yourself lucky that you had the cash to help him out in the first place, and secondly that he's paying you back because he's recovered from the financial trouble he was in. Life's too short to be wondering if you should have asked for interest. I have loaned 2 siblings money in the last 10 years and got it back when they had it. Not once did I consider asking what interest could I have accrued on that money. But they needed it, and paid it back without me asking for it.

He won't forget that you helped him out, but don't try to make it awkward now by suggesting interest. You did a good deed. You'll be remembered for it. Do something with the money when you get it back!

18-01-2023 6:15pm

https://www.boards.ie/discussion/comment/120123343#Comment_120123343

Everyone has use for €50K. I have a 10 year state savings bond which will mature by the next 3 years, and I can assure anyone I will have use for it, be it a car, a home improvement, or something I’ve not even thought about yet. I will have use for it.

Re interest, I personally wouldn’t charge it to a relative or friend but I would expect every effort to be made to repay me as soon as the person would be genuinely on their feet and I’d be keeping my eye on the situation. I always expect another to treat me as decently as I have treated them, and I’m assertive about it.

18-01-2023 6:27pm

My tuppence worth of advice to anyone who is considering lending to give a dig out to any relative/friend, is to carefully draft up a Promissory Note, to be “signed, sealed & delivered” by borrower and lender. Let the lender keep the note and provide borrower with an identical copy marked “copy”. Such a thing will help prevent misunderstandings and at least keep the borrower’s mind focussed as to the terms under which they borrowed. Especially important for any four or more figure sum.

Sallywag37 · 18-01-2023 6:49pm

https://www.boards.ie/discussion/comment/120123167#Comment_120123167

This is a very thoughtful response. A lot to think on here. Thank you.

Sallywag37 · 18-01-2023 6:59pm

https://www.boards.ie/discussion/comment/120123334#Comment_120123334

Must be a lot of people out there sitting on their hoops so. €20,000 is only two years savings at less than 30 quid a week.

10000maniacs · 18-01-2023 7:07pm

https://www.boards.ie/discussion/2058280112/loaned-money-to-a-family-member-could-do-with-some-advice

I had €100,000 in the EBS since 2017 and guess how much interest it has accumulated?

€750 is the answer.

But loans are different because of inflation.

If you didn't loan the €50,000, what would you have done with it?

Would it have been sitting in an EBS (or whatever) account generating peanuts?

Victor · 18-01-2023 7:21pm

https://www.boards.ie/discussion/comment/120125706#Comment_120125706

€30 x 52 x 2 = €3,120.

To save €20,000 in two years means €192/week.

Jim_Hodge · 18-01-2023 7:34pm

https://www.boards.ie/discussion/comment/120125706#Comment_120125706

Do the maths there again.

Sallywag37 · 18-01-2023 7:42pm

https://www.boards.ie/discussion/comment/120125761#Comment_120125761

Excuse me, I meant a day. There are plenty of people who could save twenty grand in two years if they stopped smoking, or drinking or eating regular take away meals. I know people who smoke like chimneys, drink like fish and eat frequent curries delivered to their door then complain that they've no money.

18-01-2023 7:42pm

https://www.boards.ie/discussion/comment/120125706#Comment_120125706

30 quid a week over two years = €3,120.

How are you making it €20K? If so, can you tell me?

Squatman · 18-01-2023 10:16pm

https://www.boards.ie/discussion/comment/120125706#Comment_120125706

not sure what bubble you live in, but genuinely, if you were to look at your friends, how many do you think have that sort of money?

if you think more than 1 in 10, (assuming not saving for a house) then your D4. the average industrial wage is 43k (jobted.ie). or 3683 gross per month. Assuming single, this is 2853 after tax (talent.com). the average cost of rent in ireland is 1460 per month (cite RTB website). I would expect mortgage costs to be similar. leaving 1400 after tax. saving 30 per day, would leave them with 500 for esb, food, heat, transport, washing, tv licnece, phone, laptop/tablet, clothes per month. so, on average, it is not normal to save 20k in 2 years, unless your in a D4 type bubble

Jim_Hodge · 18-01-2023 10:26pm

https://www.boards.ie/discussion/comment/120126648#Comment_120126648

There's still considerable amounts being saved though. From 2017: "Almost two thirds (64%) of Irish people have money saved on deposit, averaging €45,500 each, according to a recent Standard Life survey". And savings rates have increased since 2020.

Big Bag of Chips · 18-01-2023 11:03pm

OP, are you actually looking for advice on your issue? Personal Isssues is not the forum for general discussion on savings and investments, If you are looking for advice regarding the loan can I ask that you stick to discussing that. If you want a general discussion surrounding savings we will lock this thread and you can start another one elsewhere.

Thanks

Sallywag37 · 19-01-2023 12:08am

https://www.boards.ie/discussion/comment/120126648#Comment_120126648

I have friends and acquaintances from across a very broad sweep of society and no, none of us live in Dublin 4. You have some very apparent hostility towards people who have more money than you. I'm glad to say I never shared your sentiments, even when I was broke on the bones of my arse. There is nothing wrong with people dedicating themselves to hard work and saving for the future. It doesn't warrant your hostility.

And Big Bag of Chips, you can feel free to lock the thread now. Though I have to say if a mod was going to step in I'm surprised it didn't happen earlier in the thread when the poster above began hurling personal insults at me.

Big Bag of Chips · 19-01-2023 12:16am

Thread locked as requested by poster.

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

Answers