borrowing from family

GroovyGeek
Tue, 29 Apr 2008 00:37:31 +0000

I would stay away from borrowing money from family members. A “slightly better” interest rate is not worth it!



Avoiding the usurious “loan origination fees”, which can add up to 4% of the total loan amount, would make this arrangement worthy of consideration. However, one should carefully consider borrowing from family — are you close, have you had a reasonable relationship in the past, etc, etc. Some sort of a written arrangement that spells out amount loaned, interest rate, and payment due dates is definitely a must have, unless you trust your inlaws unconditionally. I would borrow from mine or loan to them on a handshake without thinking twice.