Comments on: Would You Take a Loan From Your Parents?

By: James Pollard

James Pollard — Sat, 13 Feb 2016 10:25:19 +0000

I would never take a loan from any family members. That’s just me though. I have an extremely strong aversion to mixing family and personal finance.

By: Chuck

Chuck — Sat, 06 Feb 2016 03:32:10 +0000

Don’t do it. Instead get a line of credit on your Vanguard brokerage.
Stash the $900/mo and know that in the slim chance of the $14k emergency coming up you could easily get the cash from the brokerage.
Probably not the fiscally best, but honestly, ~7% on $14k won’t kill your financial position and it will keep you from being indebted to your parents and continue your independence.

By: Elizabeth

Elizabeth — Thu, 04 Feb 2016 03:18:51 +0000

Dude! I haven’t read a single comment yet, but you do not need a family loan right now. IF your kid gets super sick or IF you face a layoff or crazy emergency, then it is fabulous to know you have parents who will loan you money (heck they sound like they type to outright GIVE you money in a true pinch). But borrowing $14K just to pad your reserves is crazy-talk.

First of all, you don’t need it. You’d literally just be saving it “just in case.

Second of all, having that cushion psychologically discourages you from saving. It takes away the “holy s**t I only have $3K in savings, we’d better not spend a freakin’ DIME that we don’t have to for awhile!” feeling which is very normal and rational and will help you rebuild your reserves quickly.

I have borrowed money from my mother. I borrowed from her instead of a bank to buy 2 rental properties, and she has a promissory note and deed and earns a market rate of return (I in turn got 100% financing and zero underwriting hassle). Borrowing from family is great if it’s a win-win or if you are in a true dire circumstance, but in this “hypothetical” case I just can’t see any point to it.

By: Fervent Finance

Fervent Finance — Wed, 03 Feb 2016 21:28:10 +0000

I borrowed about a thousand bucks to get me through the last semester of college, and paid it back with my first big boy paycheck a few months later. This is tough. I say I’d only tap it IF an emergency came up and I needed it. But that’s just me, so it doesn’t matter :)

By: E

Wed, 03 Feb 2016 18:41:36 +0000

Don’t look a gift horse in the mouth- you will never find a 0 interest loan, if it is offered take it!

By: Financial Samurai

Financial Samurai — Wed, 03 Feb 2016 18:24:52 +0000

If I needed a loan, there’s no better institution to borrow from than the parents! I would ensure I offer them the highest interest rate possible. They’d earn money and help me and get their money back. Better than investing in some nefarious or nebulous institution where you have no relationship!

Sam

By: J. Money

J. Money — Mon, 01 Feb 2016 11:54:51 +0000

In reply to MonkeyNutz. Thanks MonkeyNutz.. I need an nickname like that!

By: J. Money

J. Money — Mon, 01 Feb 2016 11:49:53 +0000

In reply to Lee S. Hah! Smart man.

By: J. Money

J. Money — Mon, 01 Feb 2016 11:47:57 +0000

In reply to Katydid13. Good job on the timing! I did the opposite and it sucked :)

By: J. Money

J. Money — Mon, 01 Feb 2016 11:44:07 +0000

In reply to madeline.

Great way to think of it too! No one’s brought that one up yet :)

It takes a lot for me to be bent out of shape one way or the other – especially with money – so taking the loan to help my wife out or not would leave our relationship just fine… In fact, I kinda want to just take it to make her feel better and happy! I’m not super against debt when the money’s there to be repaid at any time. Only when it’s being taken out for nonsense and the whole financial picture is out of whack.

Great comment!