Comments on: How To Properly Loan Money to Family, Friends

By: Shirley

Shirley — Thu, 21 Oct 2010 12:29:40 +0000

Jordan, thank you for the web address. I scanned it very quickly but it looks like it may have some good ideas that I can put to use.

By: Jordan Daniels

Jordan Daniels — Thu, 21 Oct 2010 11:19:56 +0000

Hey Thanks! The article was really helpful. Didn’t know that loans between related parties needed to have interest rates above the federal level. Makes it good investment opp. for lenders though it could be a bit tough on the borrower. There are some great online websites that support inter family loans, most notable being LoanBack (www.loanback.com) which has great loan management and structuring tools for both lenders and borrowers as well as loan documentation and promissory notes to seal your contract.

By: Zane Austin

Zane Austin — Wed, 21 Jul 2010 02:20:29 +0000

Because fiscal responsibility isn’t taught in the home much, loaning money to family with all the correct documentation was at first very emotional for our kids. By the time they had reached 25 years old they “got it” that this is a loan and NOT a gift. Sucessful fiscal understanding became very clear from that point on. The “you owe me” attitude of our children disappeared though I had to garnish the wages of one son taking advantage of his family position.

By: Marci

Marci — Fri, 19 Dec 2008 03:02:28 +0000

And my personal fav rule: Never lend them more than you can afford to lose.

By: Jim

Jim — Tue, 09 Dec 2008 18:36:04 +0000

Nice article Jim. I had no idea there were minimum interest rates for such loans.

By: Donny Gamble

Donny Gamble — Tue, 09 Dec 2008 15:56:11 +0000

Even though I think it is a bad idea to rent because you are simply wasting your money and not getting anything in return. Due to the circumstances of today’s economy, it might actually be beneficial to rent until the economy gets a little bit better.

By: MoneyMateKate

MoneyMateKate — Tue, 09 Dec 2008 14:56:28 +0000

Thank you so much for this article! I knew there were guidelines out there, had never seen them, but really appreciate that we’ve been handed tax-related reasons to put a family loan in writing that will minimize the awkwardness inherent in wanting a written contract. I also didn’t realize that the giver of a >$12K gift paid tax – I thought it was the recipient. Again, thanks.

By: CK

CK — Tue, 09 Dec 2008 14:21:20 +0000

The proper way is don’t.

By: Cameron

Cameron — Tue, 09 Dec 2008 13:02:13 +0000

It’s pretty ridiculous I think that for a loan that I may want to give to my family or friends has to be above the applicable federal rates. Just another step in the process where they try to get your money.