Sometimes, you might have to visit the bank of Mom and Dad. I did it once. I had to borrow a couple thousand dollars to cover my room and board during my study abroad trip.
My parents told me I didn't need to pay them back, but I insisted. We established ground rules - I had loan money coming the following semester, so I would use my refund check to repay them. It ended up working out just fine - they got their money back, and I didn't blow my refund check on something stupid.
Loans can be hard to come by in this day and age, and even if young people can get a loan, the interest rates can be pretty rough. Some members of Gen Y turn to family members to avoid crazy interest rates and aggressive repayment plans.
But borrowing money from parentals isn't always so easy. If you're considering asking for a loan from a family member, there are a few things you should think about.
First, make a commitment to yourself that you will pay the money back. Don't take advantage of your lenders just because they're your parents. Money disputes can get ugly at the expense of a relationship. Make sure both parties establish set ground rules such as: will interest be charged? How long should the repayment plan be? What if I can't meet the requirements?
Then, type up a document with specific conditions, and consider having it notarized. Even if you have a great relationship with your family, money can make things tense (or worse). Avoid the relationship strain at all costs!
Thanks to notmadeofmoney.com for the article!