<p>My parents have agreed to pay $25,000 a year for college, so after scholarships I'll have to take out $10,000 to $15,000 per year in loans. I have no problem with this- it's generous that my parents are willing to pay that for my education and I would like to contribute to it as well. However, that's a lotttttt of loans to pay back. I'm not so much worried about the loan part as the interest. Won't I basically end up paying double what I take out? Anyway, getting to the point..has anyone taken out loans..from their parents? My parents have about $800,000 in cash/investment savings that they won't be accessing for quite a while. I'm considering asking if I can like..take a loan from them instead of a bank. I know it's supposed to be risky to borrow money from family members, but has anyone had experience with this?</p>
<p>Bump? I realize this is an unusual topic :/</p>
<p>You could ask but think of the consequences. I am sure you have every intention of paying them back but reality and paying your own bills is more difficult then most realize. Will it be too easy to not make payments if you are on a tight budget after graduation? Many kids unwillingly take advantage of their parents. Do you have siblings? How would they feel? Will you be angry if your parents say no? Just things to think about.</p>
<p>I've taken two loans from my parents, one in grad school and one years later to buy a house. Both times I offered them interest that was above what they were making on their investments (ie, 10% annual interest versus about 8% annual return). We wrote up a promissary note that we all signed and set up an amortization and payment schedule - just like a bank loan. When I missed payments (and I did - cubsfan is absolutely right) additional interest accrued on the unpaid balance. Over the years, I've paid my parents much more than I would have paid a bank. On the other hand, it's worked out well for them and it's kept the money in the family. And I really don't mind that I've paid more, since in a way I'm paying back not just the loans but also all the support they have given me over the years.</p>