7 tips for taking a car loan from family
Make sure the key terms of the auto loan, such as dates for repayment, amount and interest charges, are spelled out in writing and agreed upon by all parties, says Michael Kresh, a certified financial planner and president of M.D. Kresh Financial Services in Islandia, N.Y. Borrowers can use online search engines for promissory note templates, he says.
Getting a promissory note in writing adds formality to the car loan process and limits personal stress on all parties, Kresh says. "As a borrower, the tendency may be to pay the family member last, after all the other monthly bills are covered," he says. "Having written documentation can help the borrower view the loan with the same sense of importance as their other obligations."