Would you charge a family member interest?

[Anonymous]

For a loan? Curious. How much? How long? For example: $20,000.

[Anonymous]

No. If you don't want to lend your $$, don't, but charging interest to a relative turning to you in her/his hour of need is the height of usury. Do everybody a favor, and just say "no" outright.

[Anonymous]

No

[Anonymous]

Yes, I would charge them the Fed funds rate. But I am an economist.

[Anonymous]

Anonymous wrote:No. If you don't want to lend your $$, don't, but charging interest to a relative turning to you in her/his hour of need is the height of usury. Do everybody a favor, and just say "no" outright.

Charging a below market (but non-zero) interest is the "height of usury"? I do not think that word means what you think it means. And why would it be better to refuse to lend at all?

I might charge a small interest rate partly to keep it more formal and partly to avoid any possible tax issues, but if I thought it was just going to be a pain to calculate I might not.

[Anonymous]

I would feel like I hit the lottery if a family member gave back what I gave them, let alone pay interest.
The only family members who ever ask to "borrow" money are the ones who have money problems to begin with. It would be unwise for me to expect the money or interest back.

[Anonymous]

No.
We have lent and been lent money at no interest.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No. If you don't want to lend your $$, don't, but charging interest to a relative turning to you in her/his hour of need is the height of usury. Do everybody a favor, and just say "no" outright.

Charging a below market (but non-zero) interest is the "height of usury"? I do not think that word means what you think it means. And why would it be better to refuse to lend at all?

I might charge a small interest rate partly to keep it more formal and partly to avoid any possible tax issues, but if I thought it was just going to be a pain to calculate I might not.

Because it would be better to give a loan with no interest as a gift from the heart or not at all. Nobody on DCUM is a bank. If a relative came to me in a moment of desperation for a loan that he couldn't get from a bank, any interest would be too much. Remember, in several major religions, charging interest is considered a sin. On a personal level, if I charged a relative interest in a time of need, particularly now that the government is about to shut down and many people won't be able to pay their bills, that would feel like usury.

[Anonymous]

Anonymous wrote:Yes, I would charge them the Fed funds rate. But I am an economist.

But that is practically nothing. You just don't want them to have imputed income?

[Anonymous]

Of course.

[Anonymous]

I would charge what you'd be getting in a savings account, which at the point is sadly about one percent.

If you are super rich (over 3 million in assets) I would not.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No. If you don't want to lend your $$, don't, but charging interest to a relative turning to you in her/his hour of need is the height of usury. Do everybody a favor, and just say "no" outright.

Charging a below market (but non-zero) interest is the "height of usury"? I do not think that word means what you think it means. And why would it be better to refuse to lend at all?

I might charge a small interest rate partly to keep it more formal and partly to avoid any possible tax issues, but if I thought it was just going to be a pain to calculate I might not.

Because it would be better to give a loan with no interest as a gift from the heart or not at all. Nobody on DCUM is a bank. If a relative came to me in a moment of desperation for a loan that he couldn't get from a bank, any interest would be too much. Remember, in several major religions, charging interest is considered a sin. On a personal level, if I charged a relative interest in a time of need, particularly now that the government is about to shut down and many people won't be able to pay their bills, that would feel like usury.

What if it wasn't "I'll lose my house if I don't get 20k" but "I want to back to school and need 20k" or "I want to start a food truck and need 20k"?

[Anonymous]

Yes because otherwise the IRS will impute the tax to you as income!!

[Anonymous]

You either decide that you want to/can lend the money and are prepared to lose it, or you say no. No interest.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes, I would charge them the Fed funds rate. But I am an economist.

But that is practically nothing. You just don't want them to have imputed income?

That's not what imputed income means.

For a significant amount of money you should have them sign a note with some interest.