taking on debt for DD

[housesitters]

Hi,

My DD ( aged 27) needs to get a loan. I am not going to go into the details as to why she needs it, but it's genuine and not simply due to overspending etc. The loan would be for 14K. She is unable to obtain this due to a number of factors - only recently moved house and got a mortgage, single income, a default on a credit card from her old partner ( all paid off now).

I am happy to take out this loan in my name for her. She will make the payments each month. If the worst happened, I could afford to make the payments without if causing any great hardship.

Has anyone else taken on debt in their name, for their child and if so, did it work out ok?

I personally wouldn’t do it unless you’d be happy to end up paying it on her behalf. Never ever lend/borrow from or for family and friends, it puts a huge strain on the relationship a lot of the time

I agree. It’s not worth taking the risk on the relationship impact. I think she should stand on her own two feet, unless you’re fine with potentially coughing up the £14K (and it possibly adversely affecting your credit rating). But I’m guessing you probably wouldn’t be fine with this, otherwise you wouldn’t be posting about.

I know you said not going into details but is it for something physical like a car/ furniture that doesn't have to be 14k?

If she has only just got a mortgage and just her income why do you think she can afford a loan for £14k? If you want to gift her fine but I don't think you should lend it if you cannot afford to lose it.

I’d prefer to transfer the money to the dd (or may her bill directly) rather than any other option. Probably paying the bill directly would be my personal choice.

I wouldn't. If she's just moved house and got a mortgage to pay on a single salary I don't see how she can afford the repayments on another £14k loan.

What is so desperate that she needs to borrow more money?

.

DON'T DO IT

My only advice. Sorry OP

My mum did for me when I was in my twenties. About 5 grand so not as much. I paid it all back and never missed payments. It depends on what your dd is like

Only do this IF IT'S A GIFT. If this loan can be a gift from you that you happily pay for and that you can easily afford, then do it. If it's a loan that she will be making payments on in order to pay you back, don't do it.

This is a perfect storm which causes untold damage in relationships.

Having just got a mortgage I can’t see how it’s necessary to borrow so much or wise to do so.
This is a really large amount to borrow at today’s rates of interest. If it is for a car or furniture then it would be best to cut her cloth and make do with much cheaper options.
So yes it’s a big risk and she’s not learning to manage her money. Only you know if it’s safe to lend her the money without it affecting your own finances or your relationship with her.

Unless you can afford it don't do it as if they don't pay. You will be !!!

Talks from bitter experience !

What is the £14k for ? Consolidating loans ?

Can she afford it on top of her mortgage

If for anything else like car furniture then no ans buy smaller /cheaper

Ans maybe a £5k loan

If my kids ever needed any money and I’ve got it, I’d pay their bills. Irrespective!!

Have you got the cash to lend her rather than taking a loan?

That’s not the situation here , she would be getting into debt to help her daughter

I’m a bit surprised by these answers. I would do this for my child. My mum would do this for me. You believe she needs the loan and you could afford the repayments if she didn’t pay, so as long as you are confident she will try her best to repay you, I think it’s a reasonable thing to do. Though it is worth thinking about how you will feel and what you will do if she doesn’t keep up with the repayments. You don’t want to lose your relationship with your daughter over this.

I am happy to take out this loan in my name for her

What's the loan term?
What are the monthly repayments?
Can DD afford to repay you?
Is there anything coming up (redundancy, change of job) that means she wouldn't be able to pay you?
What about if your circumstances change and you can't afford the repayments and then for some reason neither can she?

Not saying you shouldn't do it but you might want to consider all eventualities (assuming you haven't already).

If you can afford it I would just give her the money.

My dad did it for me when I was a teenager. I worked full time at 17 and needed a laptop and dongle for internet, we took the contract out in his name and set the direct debit to come from my account. He said if I was ever even close to missing a payment to let him know but I would never have done that. You know your daughter and from what you have put she sounds responsible.

My mum took a loan out for me as my interest rates were almost triple hers. I've not missed a single payment (and never would) and it certainly hasn't changed our relationship. My standing order goes into her account the same day the loan payment comes out and it's been a life saver. It all depends on your relationship and whether it's likely to be paid or cause issue.

My parents did this for DSis when she was in her early 20s and had run up debt she couldn’t service temporarily. She was clear that she knew how it had happened and never wanted to be in that situation again, but for the moment needed help to get back on track. She paid back every penny, and always said she would look after DPs financially if they ever needed it. She has built a highly successful career - even by MN standards! She has bought my retired parents their last two cars so they didn’t have to find the money themselves, and has contributed so much in kind to the family in the years since then, including support with hospitals, cancer treatment etc. We are all very close. It will of course depend on your daughter’s personality, but if you are sure she will repay you, or you can afford to make it a gift in case she can’t, then I would say go for it. Had I had children, I wouldn’t hesitate to do it for mine.

Only question is whether you can afford it. You mention taking out a loan in your name, so that sounds like you don’t have the money in savings yourself.

Sounds like your DD has left a relationship and is getting back on her feet. It’s lovely that you want to help, but please ensure that you can afford to lose this money. Your DD maybe unable to sustain the loan and then where does that leave you financially?

only do it if you can make the payments yourself, if necessary. It's hard to say without knowing what the loan is for, but assuming a car, furniture or house renovations, I'd be telling her to live within her means for now and save up.