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

  • 17-01-2023 8:34pm
    #1
    Registered Users Posts: 59 ✭✭


    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.

    Post edited by Big Bag of Chips on


Best Answers

  • Registered Users Posts: 13,812 ✭✭✭✭elperello


    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.



  • Registered Users Posts: 22,926 ✭✭✭✭recode the site


    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.

    Nothing Known Talent Management Ltd



«13

Answers

  • Registered Users Posts: 59 ✭✭Sallywag37


    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.



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  • Registered Users Posts: 4,799 ✭✭✭Augme


    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?



  • Registered Users Posts: 7,312 ✭✭✭YellowLead


    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 🤷🏻‍♀️



  • Registered Users Posts: 195 ✭✭FoxForce5


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



  • Registered Users Posts: 59 ✭✭Sallywag37


    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.



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  • Posts: 0 [Deleted User]


    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.



  • Registered Users Posts: 22,926 ✭✭✭✭recode the site


    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.

    Nothing Known Talent Management Ltd



  • Registered Users Posts: 10,152 ✭✭✭✭Jim_Hodge


    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.



  • Registered Users Posts: 6,403 ✭✭✭Allinall


    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.



  • Registered Users Posts: 59 ✭✭Sallywag37


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



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  • Registered Users Posts: 1,736 ✭✭✭oceanman




  • Registered Users Posts: 10,152 ✭✭✭✭Jim_Hodge


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



  • Registered Users Posts: 59 ✭✭Sallywag37


    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."



  • Registered Users Posts: 29 Cat2022


    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



  • Registered Users Posts: 59 ✭✭Sallywag37




  • Registered Users Posts: 1,244 ✭✭✭Brid Hegarty


    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???!



  • Administrators Posts: 13,426 Admin ✭✭✭✭✭Big Bag of Chips


    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.



This discussion has been closed.
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