“I’m not a loan shark”: I loaned my sister $ 20,000 and she paid me back after two years with insane interest: 30%. What do I do?
I loaned my sister $ 20,000 to help her buy a new house. We didn’t put any conditions in writing, but she said she would pay off the loan in six months. (If it took longer to pay off, and that was OK for me.)
Now she has paid off the loan. She included an insane amount of interest with the repayment: 30%. I told him I didn’t want interest, the amount of interest is ridiculously excessive, and I absolutely cannot take it.
She maintains that this is not too much because it took her over two years to repay the loan. I need help convincing her that this is too much. If I deposit her check into my account and write her a check to pay off the interest, I know my sister – she won’t deposit my check.
I tried to reason with her and pointed out to her that depositing the original loan amount of $ 20,000 on a CD would have made $ 600 and not $ 6,000, but anyway I wasn’t expecting any. interest.
She is very stubborn and insists that if I just look at her charts and graphs then I will be sure she is right.
Could you please support me here?
I am not a loan shark.
Please don’t tell me to accept his generosity. I can not. It would be like stealing my sister and I won’t.
Just a sister
It’s quite different from a recent letter I received on how to calculate the interest rate on a $ 6,000 12-year loan to buy a house. It took all kinds of financial gymnastics to come up with a figure that is fair but not overly generous. This letter, however, was written from the perspective of the person who received the loan rather than the lender. You are in a healthier position, although still a little uncomfortable.
In the absence of a transfer, I have a suggestion. Meet your sister for dinner and, before ordering, tell her that you need to step aside on something. Give him a card with a cashier’s check with the following quote from Polonius in Hamlet, Act 1, Scene 3. (Forgive me, I read it in high school.) “Neither a borrower nor a lender, For the loan often loses both himself and friend, And the loan blunts the edge of agriculture.
If that means so much to your sister, say that you will accept the experience of a dinner for a check. Tell her she’s paying for it. Deduct the price of the dinner from the $ 6,000 and use the cashier’s check to give him the rest. Explain to her that it meant a lot to you to be able to help her, and getting 30% back would only spoil the gesture for you. And since dinner is a gift from her to you, there would be more bad ways to spoil it by having an argument.
I have heard of relationships between friends and relatives deteriorating because of a bad debt, but never because of an astronomical interest rate given by the borrower. But it illustrates once again the risk of mixing finance and friendship, even with the family. Your lack of a notarized loan agreement was a leap of faith, but it also shows that lack of clarity at the start of the process can lead to complications later. Keep us posted on how it’s going.
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