re: Borrowing money from family and being charged interest?

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I rather pay interest to someone I know than Sallie Mae. I would've taken him up on that offer.

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This

I know of a guy that does this. He's around 2-3 which is still way better than the borrower can get and a solid return for him.

OP has an issue with it b/c it his FIL and I get that.

Plus, on $10K the interest is negligible.

Take the deal. It's a better deal than the student loan people are offering you.

Your father-in-law is essentially giving you the difference between 2% and whatever the bank is charging you.

That's called being nice. Sure, it involves more math than other acts of generosity, so maybe it's not as easy to recognize it when you see it. But not all people are the same. Some think in a money-oriented, business-oriented manner. See it from his perspective. You're helping each other out. That's good business.

The only way this is bad business is if you don't pay him back. It's that simple.

You should be done paying on $10,000 in about 2 - 3 years. That's not a lot of time.

Surely you can pay this guy every month, right? You pay your student loan people every month, right? What's the difference?

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So my father in law asked me today what my student loans were interest wise. Offered to lend me money at 2%. I don't want his money and declined. Got me thinking though. Anyone have a family member charge them interest on shite? This cat has quite a bit of money. Said his money isn't making him shite in his credit union..

Don't care, I take care of my bills and didn't ask him for anything. He asked me.

Edit: we talking just under $10k

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If you loan more than $14k to anyone interest free, the interest you "should have charged" is subject to a gift tax by the IRS. It also cannot be a gift in disguise of a loan.

I loaned a family member 15K to help start his own business. I charged him 4%. He had a solid business plan and have no fears about him paying me back. It was a win win for both of us.

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Being a debtor puts you beneath your creditor socially.

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Only if you make it that way.

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Haha, clearly not that much money

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HaHa, clearly you don't know people with enough wealth to keep a nice chunk of play money in liquid cash.

The other problem is this. While OP may be a wonderful credit risk, shite happens. Smart, industrious people end up broke sometimes through no fault of their own. Should father-in-law be expected to treat it as "just business",take a judgment and execute on his daughter's assets in the event of a default?

It can never be just business with family if things go badly.

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HaHa, clearly you don't know people with enough wealth to keep a nice chunk of play money in liquid cash

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So you think it would be wise to take said liquid cash and make it illiquid?

The wife and I did this with my mom for a couple of our student loans with 7.5% and 9% interest. She offered us 2%. I'd rather pay her than Sallie Mae and it will save us a ton of money in interest.