Loaning money to family

MiketheGrinder

Registered Member
#1
My sister wants to borrow $800 to get her car repaired. She is terrible with money and doesn't bother to change her poor habits, so I'm on the fence about loaning her the money. My sister needs her car to get to work, which I understand. I'll likely fund the repair. When I give her the $800 how do I best make her understand that it is a loan and not a gift? What is a reasonable amount of time to expect her to pay me back. She makes $14 an hour, has a lot of debt, but very few bills. She only pays a car payment and insurance. To be clear, I can't just gift her the money - $800 is a large sum to me and we have huge student loans to pay off.
 

Godsmirror

Registered Member
#2
Look into the legal possibility of handling it like a title loan. You know, like those companies that take your title when they give you a loan. If you don't pay off the loan by the terms set forth, they get the car.

Remember....a loan is a business transaction. The fact that it happens between family members doesn't take away from that fact
 

Interis

Registered Member
#3
I thought that if you really want to give the agreement a strong legal basis, you need to have it acknowledged by a notary. I'm not specialized in law, though, so I could be wrong.

Another option is to give her a smaller amount of money and end it there. Having a money problem with a family member is very uncomfortable and complicated that I'd rather avoid such situation if possible.
 

MissMe

Registered Member
#4
Write it up on paper and get it notarized. This will actually only help if you plan on taking her to court if she doesn't pay you back. If you don't plan on any legal action then don't go through the trouble. It sounds like you know it's going to be difficult to get your money back before you even give it to her.
 
#5
I would hate to have to take a family member to court if I had let them borrow a lot of money from me and didn't get paid back.

But I wouldn't want them to get away with it either.

Hence, I don't let people borrow money from me, even siblings. I'm not a bank.
 
#6
My sister wants to borrow $800 to get her car repaired. She is terrible with money and doesn't bother to change her poor habits, so I'm on the fence about loaning her the money. My sister needs her car to get to work, which I understand. I'll likely fund the repair. When I give her the $800 how do I best make her understand that it is a loan and not a gift? What is a reasonable amount of time to expect her to pay me back. She makes $14 an hour, has a lot of debt, but very few bills. She only pays a car payment and insurance. To be clear, I can't just gift her the money - $800 is a large sum to me and we have huge student loans to pay off.
It's a tough one. I would let her know that it's a loan and let her pay it back in as small payments over as long a period as you can financially handle but let her know that your back will be up against the wall if she misses any payments.
 
Top