“I am not a usurer”: I lent my sister 20 thousand dollars, and two years later she paid me insane interest: 30%. What should I do?

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Dear Quentin,

I loaned my sister $ 20,000 to help her buy a new home. We didn’t stipulate any terms in writing, but she said she would repay the loan in six months. (If the maturity took longer and was fine with me.)

Now she has paid off the loan. In repayment, she pledged an insane amount of interest: 30%. I told her that I did not need interest, the amount of interest is ridiculously high, and I absolutely cannot agree with that.

She claims that this is not that much because it took her over two years to pay off the loan. I need help to convince her that this is too much. If I put her check in my account and write her a check to get the interest back, I know my sister — she won’t pay my check.

I tried to convince her and pointed out that depositing the initial $ 20,000 loan on CD would have earned $ 600, not $ 6,000, but I didn’t expect any interest anyway.

She is very stubborn and insists that if I just look at her charts and graphs, I will be convinced that she is right.

Could you please support me here?

I am not a usurer.

Please don’t tell me to accept her generosity. I can not. It would be like stealing from my sister, and I won’t.

Just a sister

Dear sister,

This is very different from the last letter I received on how to calculate the interest rate on a $ 6,000 loan for 12 years to buy a house. It took all sorts of financial exercises to come up with a fair, but not overly generous figure. However, this letter was written from the perspective of the person receiving the loan, not from the perspective of the lender. You are in a healthier, albeit somewhat uncomfortable position.

If the bank transfer fails, I have one suggestion. Meet your sister at dinner and tell your sister that you need to clean up before ordering. Give her a cashier’s check card with the following quote from Polonius in Hamlet, Act 1, Scene 3. (Sorry, I read it in high school.) And a friend, And borrowing blunts the edge of farming. “

If it means so much to your sister, tell her that you will accept the dinner experience instead of a check. Tell her she pays for it. Subtract the cost of dinner from $ 6,000 and use the cashier’s check to return the balance to her. Explain to her that it means a lot to you to be able to help her, and if you get 30% in return, it will just ruin your gesture. And given that dinner is a gift from her to you, besides, it would be bad form to spoil it with an argument.

I have heard of relationships between friends and family that go bad because of bad debt, but never because of the astronomical interest rate provided by the borrower. But it once again illustrates the risk of confusing finances and friendships, even with family. Your lack of a notarized loan agreement was a show of faith, but it also shows that a lack of clarity at the beginning of the process can lead to complications later on. Let us know how it goes.

Read also: I want to get my husband’s life insurance policy. He says that “ hell will freeze over ” before he becomes more dead than alive

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