Asking a family member for a loan may seem like a great idea -- after all, they may just give you the money and not expect repayment, a deal you'll never get from any bank. And as it turns out, luck may be on your side: More than three-quarters of baby boomers (Americans born between 1946 and 1964) feel obligated to financially support their adult children if their kids ask them to, from helping with health insurance payments and rent to allowing adult children to move back home, according to a 2011 TD Ameritrade survey [source: TD Ameritrade].
But the family reunion is not the place to make the request -- a loan is a business transaction, not something you ask about between karaoke songs or swapping stories about your Uncle Bob. Loans are not to be taken lightly, whether the amount is $5 or $50,000, and financial experts warn against getting into a lender/lendee relationship with a family member without arranging some sort of contract -- a written, signed contract that states at the very minimum the amount loaned and the repayment schedule. Without one, would you be comfortable taking legal action against a family member who hasn't paid back your loan?