Loaned money to a family member. Could do with some advice.

#1 · 17-01-2023 8:34pm #1

I loaned an extended family member 50K in a series of loans between the summer of 2017 and the summer of the following year. He was about to hit the wall financially so I offered him the money to tide him over till things got better for him. They got dramatically better and he's been doing much better for a few years now. He gave me twenty grand back before Christmas so I could sort out my tax and I told him I need the other thirty back pronto. He's arranged to give it to me and it should be arriving in the coming days. The thing is that, rightly or wrongly, I'm feeling a bit resentful about the situation. I made the first instalment of the loan five and a half years ago (and that was the largest instalment by far) so what I'm thinking is, I could have done a lot more with fifty grand over five years ago than I could do with it today.

Is it really reasonable of him to just give me fifty grand back as if over half a decade hadn't passed by? He works in finance so he's very well aware of the reality of inflation etc. I care a lot more about my relationships than I do about money, which is why I haven't put the hammers on him before now. I've been thinking about this lately though and I wonder if my allowing him to behave as if fifty grand today is the same as fifty grand in 2017 won't damage the relationship anyway. I can't come up with the answers to these questions and would really appreciate some objective advice.

Should I ask him for interest in line with inflation? What would that sum be anyway, or how to find it out? Am I being mean spirited? Is he taking the piss?

Thank you in advance.

elperello · 17-01-2023 8:44pm

It's very possible that you aren't being mean spirited and he isn't taking the p.

You may be just having second thoughts too late and he thinks you were very good to him and is grateful.

You gave him the loan and he is paying it back so there is no breach of trust.

Hard to say how you can resolve this to a situation where you get a few euros extra.

Maybe he will make some gesture, failing that you could open a dialogue.

It's a delicate position to be in if you want to remain on good terms.

17-01-2023 9:00pm

https://www.boards.ie/discussion/comment/120122125#Comment_120122125

He offered interest but you never formalised it. I would not pursue it now.

17-01-2023 9:04pm

Quite often, somebody who has run into financial quicksand and asked/hinted for a loan is not the type to be very scrupulous about repayment. Their primary concern is likely to be mé féin, you, the lender, are merely a bank. It never feels good.

Jim_Hodge · 17-01-2023 8:37pm

No you really couldn't now ask for interest. A family load with no agreement on repayment, duration, or interest is just that, a family loan.

MrMusician18 · 17-01-2023 8:39pm

To be honest, when it comes to loaning family and friends money you're lucky to be getting the principal back at all.

If it were sitting in a bank account, you'd be looking at missing out on 0.1% interest. Forget about inflation - that's the missed return.

Sallywag37 · 17-01-2023 8:40pm

He did mention in our opening conversation that he'd sort me out with interest when he could get the money back Jim_Hodge, but we didn't agree an amount of interest or a duration of the loan, because we didn't know then how long it'd take him to get back on his feet. That's part of why I'm feeling resentful, because he just seems to have forgotten about that part of the conversation and I don't know if that's by convenience or because he genuinely forgets, which he could well do after several years.

Spanish Eyes · 17-01-2023 8:40pm

If you did not have any legal arrangement or similar re the loan, TBH I'd be very glad to be getting it back at all! I thought you were going to say he was dithering and paying you in dribs and drabs and he might never repay you the entire sum.

Get the money back first. Then if you feel like it you could say something to him, but make sure the money is in your fist before doing anything. I can see where your irritation is coming from, but it's probably not worth it in the long run to push the issue now. Are you prepared to fall out over this? If you don't mind, go ahead (after getting the money back though).

Allinall · 17-01-2023 8:43pm

If you had €50k on deposit since 2017, how much interest do you think you would have got?

You didn’t agree anything with the loan, so be thankful you’ll receive it all back, and move on.

He’s your brother, not someone who borrows in desperation off a loan shark.

Augme · 17-01-2023 8:49pm

Asking for interest in line with inflation after the fact is pretty outrageous tbh. Put yourself in their position, why would they agree to that now?

YellowLead · 17-01-2023 8:51pm

I’m sorry but you were the one who gave the loan without proper agreements. It’s more your fault than it is his you are unhappy 🤷🏻‍♀️

FoxForce5 · 17-01-2023 8:52pm

When he gives back the balance wait a week and ask him for a 50k loan. If he says no, well...

Sallywag37 · 17-01-2023 8:52pm

You've missed my second post Augme, he offered interest from the start.

I think you have a point elperello, I care more about the relationship than a few bob in interest.

TheW1zard · 17-01-2023 8:53pm

Just get your 50 back

Jim_Hodge · 17-01-2023 8:56pm

Ask him for the €27.24 interest due and pay Revenue the 33% DIRT due. After all €17.98 is €17.98.

17-01-2023 8:57pm

You should tell him that you could have bought bitcoin with that 50k and therefore he owes you basically his whole house and a chunk of his kids future earnings.

17-01-2023 8:57pm

https://www.boards.ie/discussion/comment/120122056#Comment_120122056

OP could have got something more significant with a State Savings Bond. Nowhere did OP say he was a brother, he said he’s an extended family member.

Jim_Hodge · 17-01-2023 9:01pm

https://www.boards.ie/discussion/comment/120122157#Comment_120122157

He also could have invested in shares that bombed. Opportunity cost doesn't come in to it when you make a condition free, non specific loan to a family member.

spakman · 17-01-2023 9:02pm

You're being ridiculous

Shauna677 · 17-01-2023 9:10pm

You are very very fortunate to be getting your money back. Many never receive a cent back.

Allinall · 17-01-2023 9:12pm

https://www.boards.ie/discussion/comment/120122157#Comment_120122157

If the OP wanted a return on the €50k,they should have invested it somewhere that offered a potential return.

They instead helped out a family member, which did not offer a return.

Sallywag37 · 17-01-2023 9:16pm

He did offer a return Allinall, but I've made that point twice already so won't repeat it again.

17-01-2023 9:16pm

As others have said, if interest wasn’t specified at outset I wouldn’t go looking for it in retrospect. What OP wants, I think, as much as anything, is an acknowledgement that the loan was appreciated and took the extended family member out of a bad situation. Would this be the nub of it?

If you don’t want to fall out, maybe best type of thing to say is along the lines of “thank you for the repayment in full, and I’m glad you now find yourself in a much better situation, it was really good being able to help you at such a critical time”. In response you might get some expression of appreciation.

Count Dracula · 17-01-2023 9:18pm

It was nice of you to help out what sounds like maybe a sibling in law? Not sure.

To be frank you are very lucky to be getting back a penny. In my experience lending money to family has been a nightmare. It rarely works out well either way.

Given that it has taken you so long to have such an issue with it, I get the opinion that this is now very much your problem? You have gone from being a lifesaver to being a thorn in someone else's side. That is the real problem I have with sorting out relations who are shight with money, they rarely feedback the respect you deserve for your assistance. There is also the related idiom that your debt has now created between you both, it is like the loaner now becomes the bad guy overnight, I really hate that shight, but it becomes that.

Whenever I give money to people I care about i always never expect to get it back, most people who need it are crap with it for starters?Don't let it get to you, money is a chunt of a thing that gets in the way of everyone's life, the last thing you need is it disrupting relationships within your own family, it is simply not worth it.

oceanman · 17-01-2023 9:19pm

https://www.boards.ie/discussion/comment/120122239#Comment_120122239

true...never loan money to family or friends.

Jim_Hodge · 17-01-2023 9:20pm

https://www.boards.ie/discussion/comment/120122302#Comment_120122302

Or...loan money to family or friends but don't expect to always get repaid.

Sallywag37 · 17-01-2023 9:21pm

https://www.boards.ie/discussion/comment/120122294#Comment_120122294

You've a point there Count Dracula. There's an old saying I'll be paying more attention to in future - "Neither a borrower nor a lender be."

Cat2022 · 17-01-2023 9:21pm

I bet the family member remembers the initial conversation about interest and is hoping you don't bring it up. He works in Finance, he knows what he is doing

Sallywag37 · 17-01-2023 9:25pm

https://www.boards.ie/discussion/comment/120122315#Comment_120122315

That's exactly why I'm resentful.

Brid Hegarty · 17-01-2023 9:46pm

https://www.boards.ie/discussion/comment/120122332#Comment_120122332

And since things got 'dramatically' better, do you think he could've gotten you this money back in say 2019 or 2020 if he had wanted to? Did you have to hound him for that 20k he gave you before Christmas, or did he offer it? He must have seemed like a pretty honourable guy for you to trust him in the first place???!

Big Bag of Chips · 17-01-2023 9:48pm

If it's really bothering you then just say it. You offered help at a time when they needed it but now obviously feel you've been taken advantage of. I wouldn't ever expect interest from a family loan. If the borrower was going to pay interest they'd have been better off just going to a bank/credit union.

The fact that you are getting your money back, in full, but still feel resentful means you probably should say something. Most people would be glad to get their €50,000 back, but you feel there should be more acknowledgement. There will already be an atmosphere now anyway as you are feeling resentful of them. So just ask them out straight about interest.. how much are you thinking?

A quick calculation on a credit union site shows a personal loan of €50,000 over 5 years at 11.25% would incur €15,601.92 interest.

Bank of Ireland have a personal loan of €50,000 over 5 years at 6.8% costing €8,788 interest.

Jim2007 · 17-01-2023 9:48pm

https://www.boards.ie/discussion/comment/120122332#Comment_120122332

Get real, you are talking about next to nothing in interest or inflation and I very much doubt you have done anything more than leave on deposit for the last five years as you don’t seem to be very well up on financial affairs, if anything you might have lost a large chunk of it.

You harp on about the relationship being more important so demonstrate that and move on.

Sallywag37 · 17-01-2023 10:00pm

https://www.boards.ie/discussion/comment/120122427#Comment_120122427

I wouldn't expect anything as dramatic as fifteen grand or eight grand Big Bag of Chips, but in his shoes I'd consider it the decent thing to give back a couple of thousand on top of the loan in acknowledgement that it had been over five years and fifty grand today did not have anything like the purchasing power it had at the time of the loan. And no, he couldn't have gone to the bank or anywhere official then for a loan as he was balls to the wall and creditors were chasing him at the time.

Big Bag of Chips · 17-01-2023 10:01pm

So just say it to him then...

Iodine1 · 17-01-2023 10:19pm

https://www.boards.ie/discussion/comment/120122428#Comment_120122428

This is exactly the point! You wouldn't have invested in anything or you would have done so beforehand, and your interest earned would be much less than 1%. Inflation was only significant recently and your relative is not responsible for that, you would have suffered it anyway. You are now getting narky about very little and are indeed lucky to be getting it back at all. Most people with money trouble continue on to have money troubles and the loans just follow the rest of it, thus why they can't get anymore from the lending institutions.

Donald Trump · 17-01-2023 10:28pm

If it were me, I'd be happy to just get it back. And I'd wait until the money was in my account before bringing up interest for the remainder. I wouldn't expect to be receiving any though.

the_amazing_raisin · 17-01-2023 10:30pm

As others have said, you're probably lucky to be getting the money back at all, often loans to family members seem to just get written off

In principle, you didn't agree any kind of interest on top of the loan. He might have said he'd pay you something but that doesn't constitute an agreement. Technically he could give you one cent over the original amount and he'd have fulfilled his stated obligation

I would say that regarding family loans, if there's no agreed interest repayment then it's sort of implied that it's interest free

As others have said, measuring the opportunity cost is tricky. You'd at most have made a few euros in interest on a deposit account

Maybe you'd have bet big on Tesla stock and ended up with a fortune, or you could easily have lost it all. So I don't think any kind of stock market argument will work

It really depends on what you were planning to do with that money in the first place. For example if you were going to pay off debt then there's a definite opportunity cost which could be quantified. €50k off your mortgage 5 years ago for example would have saved a lot of interest

If this is the case then you could argue there was a genuine cost to you. If he's a decent sort then if you explain that to him he may offer to pay the additional amount

I would be very careful in how you approach this, you could appear to be shaking him down after the fact.

And I'll be brutally honest here, if I've got my back against the wall financially, I don't try to drag my family down with me by asking for €50k that I might never repay. As I said, you're lucky you're getting the money back at all, he might have just decided to "forget" about those loans or fob you off forever

In future, don't lend anything more than pocket change to family, it never ends well

hello2020 · 17-01-2023 10:41pm

Can you not think of him as someone who you can count on when you are in need? I will think of that as the best return than interest.

Life is full of ups and downs and yesterday he had to borrow ..tomorrow you may need his help in different shape or way...I will be glad that he is in good position to repay you as normally they never recover to pay back..

Sallywag37 · 17-01-2023 11:08pm

https://www.boards.ie/discussion/comment/120122644#Comment_120122644

You've come closer to guessing what I'd intended to do with the money than anyone else on the thread, but I'm not getting into that as some posters seem determined to believe I'd intended to leave it sitting in a deposit account for some reason and I couldn't be bothered arguing with anyone who thinks they know more that I do about my own life. Thank you for your thoughts and suggestions. They were very helpful, and I'll definitely be taking your final suggestion on board going forward.

kirk. · 17-01-2023 11:14pm

Haven't read the whole thread

I'd get the 50 back first before raising any other queries. Might set something off otherwise

Sallywag37 · 17-01-2023 11:15pm

https://www.boards.ie/discussion/comment/120122694#Comment_120122694

I'd hope we'd always be able to rely on each other when we're in need, I'd assume so too. We are family after all. But I do take your point.

callaway92 · 17-01-2023 11:18pm

I can’t believe you’re not getting stick for wanting interest on the 50k

He’s obviously had to grind to get back on his feet and is paying it all back

That’s a fair deal as far as families go. You did a very nice deed helping him out and he’s been decent enough to not ‘forget’ about the loan

If you start mentioning interest you sound less like family and more like a loan shark

I’d go as far as saying it’s kinda scummy that you’re even thinking about it, to be blunt

callaway92 · 17-01-2023 11:20pm

https://www.boards.ie/discussion/comment/120122792#Comment_120122792

Very easy to say all of this in hindsight - It’s always something that you’d have ‘made’ money on and never ‘lost’ money on somehow….

Squatman · 17-01-2023 11:23pm

https://www.boards.ie/discussion/2058280112/loaned-money-to-a-family-member-could-do-with-some-advice

this post reeks of false modesty. you gave the loan as a favour to someone in need, as is the altruistic thing to do - Kudos!!!!

you saw this person struggling and stepped in and potentially saved his life. He is since in an excellent position, and in a short period, has been able to return significant chunks of hte capital. Now, you are jealous or resentful that he or they have been able to repay, withoud duly bowing to their overlord. Keep it in the spirit it was given. dont succumb to jealousy or otherwise because the person is now doing well for themselves. I dont for a second believe that this relationship is worth a crumb to you, #"I care a lot more about my relationships that i do about money" - if this were true you wouldnt be creating a post online slating your family for a perceived good deal. Similarly, you wouldn't resent their good fortunes since. oo late, too late will be the cry when the man with the bargains has passed you by - The terms we A, you shouldnt look to make them B, because of jealousy or otherwise.

they may as a gesture of goodwill offer over and above what was agreed, but you will most likely decline this offer due to your good nature and the value you place on relationships.

PS, who the fudge has 50k spare to lend to people. id wager most the pople commenting, myself included have never had the smell of 50k, Count your lucky blessings before they hatch :)

Squatman · 17-01-2023 11:26pm

https://www.boards.ie/discussion/comment/120122309#Comment_120122309

not an old saying, a quote from polonius, from shakespeare

Sallywag37 · 17-01-2023 11:32pm

https://www.boards.ie/discussion/comment/120122835#Comment_120122835

If my thinking about interest makes me "scummy" I'd assume his offering interest must make him "scummy" too, unless your logic only runs in one direction, which I suspect it does.