DANGER when you take out a loan for your child. Make sure if nothing else it is not a generic loan and put them through the ringers to get it. It's one thing to help a child on a specific issue. Not correct years of bad habits.
Know someone who took out a 5 figure loan for their kid and they basically wound up giving money to a junky. Now a home equity loan has to be off on a senior citizens income. Unfortunately they didn't consult anyone before they did it and the kid told them it was to get his finances together to eventually buy a house. The kid was already approaching a six figure salary at work(warning bells right there). The loan was made years before the economy collapsed. The kid has since gotten laid off, never found a job that was even close to his old job and not only has drug & gambling issues but is addicted to lifestyle(before job loss). Found out the kid knew well in advance(almost two years) before his layoff and did not slow/stop his spending or make any special effort to payback the loan. 5 years after the layoff still somehow raises enough case for recreational activity and bs "business" ventures which are mostly an excuse to have "meetings" in bars. I've seen drug dealer size wads of cash come out of his pocket and he won't even try to pay the loan in any fashion even if it's 50 here or a 100 there. If he can come up with cash for his recreational activities and bs "business" ventures as he likes to call them he can pay back at least a portion of the loan.
It's one thing to want to help your child but when helping adult children the line between enabling and helping is very thin. Now I know other people who gave their kid 10s of thousands for a house down payment with no problem. But others have wound up loosing their life/houses dumping money into a junky.
First make sure the loan/money is for a very specific purpose. Generic no clear cut purpose loans are a warning sign. If it is a big loan make them name names. If they say it's for a house make them show you that house and/or give precise information about it. But if they say something like "I have to pay off billS as in plural or I have to clean up my credit etc DANGER.
HELP them but do not hinder yourself.
Know someone who took out a 5 figure loan for their kid and they basically wound up giving money to a junky. Now a home equity loan has to be off on a senior citizens income. Unfortunately they didn't consult anyone before they did it and the kid told them it was to get his finances together to eventually buy a house. The kid was already approaching a six figure salary at work(warning bells right there). The loan was made years before the economy collapsed. The kid has since gotten laid off, never found a job that was even close to his old job and not only has drug & gambling issues but is addicted to lifestyle(before job loss). Found out the kid knew well in advance(almost two years) before his layoff and did not slow/stop his spending or make any special effort to payback the loan. 5 years after the layoff still somehow raises enough case for recreational activity and bs "business" ventures which are mostly an excuse to have "meetings" in bars. I've seen drug dealer size wads of cash come out of his pocket and he won't even try to pay the loan in any fashion even if it's 50 here or a 100 there. If he can come up with cash for his recreational activities and bs "business" ventures as he likes to call them he can pay back at least a portion of the loan.
It's one thing to want to help your child but when helping adult children the line between enabling and helping is very thin. Now I know other people who gave their kid 10s of thousands for a house down payment with no problem. But others have wound up loosing their life/houses dumping money into a junky.
First make sure the loan/money is for a very specific purpose. Generic no clear cut purpose loans are a warning sign. If it is a big loan make them name names. If they say it's for a house make them show you that house and/or give precise information about it. But if they say something like "I have to pay off billS as in plural or I have to clean up my credit etc DANGER.
HELP them but do not hinder yourself.
