"MarketBeat.com's new report, which surveyed more than 3,000 parents, found that an increasing number are charging their adult children interest on family loans. "The Bank of Mom and Dad has always been generous, but even generosity comes with boundaries," says Matt Paulson, founder of MarketBeat.com. "What's striking is that while most parents don't expect repayment - and certainly not at commercial interest rates - inflation and rising costs are starting to reshape how families think about money.""
"Only 15% of parents would be comfortable with lending their kids $5,000 or more at one time, according to MarketBeat's research. Family loan repayment terms can also vary significantly by location. The top five toughest state lenders based on the interest rates parents charge were Nebraska (6.8%), Oregon (6.8%), Mississippi (6.5%), Georgia (6.4%) and Arkansas (6.3%), the report found."
Young Americans face high living costs and stagnant wages, causing some to rely on loans and family assistance. Nearly half of Gen Z ages 18 to 27 depend on financial help from family. A survey of more than 3,000 parents found increasing numbers charge adult children interest on family loans, with the average parental rate at 5.1%. That rate is lower than typical personal loan rates, which average about 12.49% for a 700 FICO, $5,000 three-year loan. Only 15% of parents would lend $5,000 or more at once. Parental loan rates vary by state, with Nebraska, Oregon, Mississippi, Georgia, and Arkansas among the highest.
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