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Lina
My angel is finally here
Member since 5/10 2559 total posts
Name:
Lindsay
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Grandma charging interest on a loan!!
I want my husband to pay off his truck early. He bought it after college and he has one more year left on it. He borrowed the money from his grandmother and it was just sitting in the bank. I want him to pay it off early b/c he is paying her 7% interset! Does anyone else think this is wrong? My grandma would GIVE me her last dollar if i needed it.
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Posted 5/27/10 8:51 PM  |
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maxsgirl
LIF Adult
Member since 1/06 2086 total posts
Name:
sarah
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Re: Grandma charging interest on a loan!!
I wouldnt necessarily think its wrong, just a little odd . After all its her cash and should could have been investing it.
I do think the % is high though.
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| Posted 5/27/10 10:27 PM |
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sleepie76
enjoying every minute
Member since 12/07 3881 total posts
Name:
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Re: Grandma charging interest on a loan!!
higher interest than I am paying on my car loan. I just got 3.74% on a refinance.
You should ask her what her refin rates are 
Yes, I think that is excessive.
Unless that is what she was earning on that account.
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| Posted 5/28/10 9:28 AM |
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lulugrrl
My 3 Blessings
Member since 3/06 6551 total posts
Name:
L
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Re: Grandma charging interest on a loan!!
If I was in that situation I would want to pay interest on the loan, but maybe a better rate, that does seem high. I htink a bit more than what it would earn sitting in the back would be reasonable.
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| Posted 5/28/10 11:00 AM |
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KLSbear
LIF Adult
Member since 1/06 1908 total posts
Name:
Karen
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Re: Grandma charging interest on a loan!!
There could be other reasons that come into play too. First, I think it needs to be an official loan written up as a signed agreement in order for her to collect on it should he default. She may have done it this way because she wanted to discourage other grandchildren from assuming that she would just loan out money freely, especially if she'd experienced a situation in the past where a relative had borrowed and not repaid money. It may have been her way of making sure he took it seriously too. If he's had the loan with her for 4 or 5 years perhaps that was better than what he could have financed for at the time, especially just out of college if he didn't have any credit history.
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| Posted 5/28/10 7:28 PM |
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Re: Grandma charging interest on a loan!!
Posted by KLSbear
There could be other reasons that come into play too. First, I think it needs to be an official loan written up as a signed agreement in order for her to collect on it should he default. She may have done it this way because she wanted to discourage other grandchildren from assuming that she would just loan out money freely, especially if she'd experienced a situation in the past where a relative had borrowed and not repaid money. It may have been her way of making sure he took it seriously too. If he's had the loan with her for 4 or 5 years perhaps that was better than what he could have financed for at the time, especially just out of college if he didn't have any credit history.
ITA
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| Posted 5/29/10 3:24 PM |
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Mkr09
.....
Member since 5/05 7550 total posts
Name:
M
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Re: Grandma charging interest on a loan!!
I think the percentage rate is a little high, but that money would be collecting interest in her bank account.
We took out a loan from my ILs and we are paying them back with interest.
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| Posted 6/1/10 9:29 AM |
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Superkat
More a stranger than a friend
Member since 5/06 9730 total posts
Name:
K
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Re: Grandma charging interest on a loan!!
Did you DH know that he needed to pay back the loan with interest? If he did, and agreed to it, then I don't think he is being taken for a ride. Maybe Grandma was trying to teach him a lesson about being fiscally responsible? Either way, I would pay it off and be done with it.
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| Posted 6/1/10 11:47 AM |
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Lina
My angel is finally here
Member since 5/10 2559 total posts
Name:
Lindsay
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Re: Grandma charging interest on a loan!!
I certainly agree with paying her back with interest and am greatful she was able to do it, I just think the percentage is a bit high for family. Especially when he could have got a lower rate through a bank. Oh well, only one more year.
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| Posted 6/1/10 1:46 PM |
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MrsKS
Thank You St. Gerard.....
Member since 12/09 8306 total posts
Name:
Kerri
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Re: Grandma charging interest on a loan!!
I think it's strange.
It would be nice to jsut lend the money.... I mean after all... family members should help you out when they can.
However, I do think that IF she wanted to charge interest then she should just be charging the interest the account would earn had the money remained. Which I KNOW is NOT 7%. I don't think she should be MAKING money off the grandkid!! But I can see her wanting to make back ALL the money she is missing out on (meaning the money she lent out and the bank interest should would have earned).
At this rate... it would probably be more beneficial to just get a bank loan for the car. I don't see the benefit to borrowing the money from grams, in this case anyway.
Message edited 6/2/2010 10:48:07 AM.
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| Posted 6/2/10 10:47 AM |
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GSLoveLI
LIF Zygote
Member since 5/10 30 total posts
Name:
Gail
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Re: Grandma charging interest on a loan!!
I dont think its unfair to charge you interest, but you CAN get a better rate from a bank.
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| Posted 6/2/10 12:53 PM |
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KLSbear
LIF Adult
Member since 1/06 1908 total posts
Name:
Karen
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Re: Grandma charging interest on a loan!!
Posted by lgdrzazga
I certainly agree with paying her back with interest and am greatful she was able to do it, I just think the percentage is a bit high for family. Especially when he could have got a lower rate through a bank. Oh well, only one more year.
If he could have gotten a lower rate through a bank, why didn't he?
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| Posted 6/2/10 7:11 PM |
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Lina
My angel is finally here
Member since 5/10 2559 total posts
Name:
Lindsay
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Re: Grandma charging interest on a loan!!
i guess his parents wanted him to borrow the money from her instead of a bank, not really sure why.
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| Posted 6/2/10 10:30 PM |
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scarpak
LIF Zygote
Member since 4/10 48 total posts
Name:
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Re: Grandma charging interest on a loan!!
Posted by KLSbear
There could be other reasons that come into play too. First, I think it needs to be an official loan written up as a signed agreement in order for her to collect on it should he default. She may have done it this way because she wanted to discourage other grandchildren from assuming that she would just loan out money freely, especially if she'd experienced a situation in the past where a relative had borrowed and not repaid money. It may have been her way of making sure he took it seriously too. If he's had the loan with her for 4 or 5 years perhaps that was better than what he could have financed for at the time, especially just out of college if he didn't have any credit history.
ITA. plus there has to be a reason he took the money from his grandma rather then the bank, and i think you cant really make a fair determination without the FULL story
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| Posted 6/3/10 12:06 PM |
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nrthshgrl
It goes fast. Pay attention.
Member since 7/05 57538 total posts
Name:
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Re: Grandma charging interest on a loan!!
I think she should at least get an interest rate she'd be getting from the bank.
While my grandmother wouldn't charge me interest, I agree with this:
Posted by KLSbear
There could be other reasons that come into play too. First, I think it needs to be an official loan written up as a signed agreement in order for her to collect on it should he default. She may have done it this way because she wanted to discourage other grandchildren from assuming that she would just loan out money freely, especially if she'd experienced a situation in the past where a relative had borrowed and not repaid money. It may have been her way of making sure he took it seriously too. If he's had the loan with her for 4 or 5 years perhaps that was better than what he could have financed for at the time, especially just out of college if he didn't have any credit history.
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| Posted 6/7/10 7:29 AM |
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jwharwell
LIF Zygote
Member since 6/10 4 total posts
Name:
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Re: Grandma charging interest on a loan!!
That seems very high. My grandmother would never charge interest, even if I offered to pay it. To each their own, but that seems unreasonable.
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| Posted 6/10/10 3:03 PM |
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