Financial advisers don’t always agree, but when it comes to lending money to family, there’s consensus: Tread carefully.
If an adult child needs help buying a first home or has a promising business idea, a family loan can be a fast and convenient option. But there’s a risk of drama down the road.
Here are tips for lending and borrowing money among relatives.
PROS AND CONS OF FAMILY LOANS
There are advantages of a family loan for a borrower: no credit check, low or no interest and flexible payback terms.
It can also be a way to help young adults learn about financial responsibility, says Walter Pressey, a retired financi…
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