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As young Americans struggle with high costs of living<\/a> and salaries that haven’t kept pace with inflation<\/a>, some of them rely on loans to make ends meet.<\/p>\n Nearly half (46%) of Gen Z<\/a> between the ages of 18 and 27 depend on financial assistance from their family, according to a 2024 report from Bank of America<\/a>.<\/p>\n What’s more, even though some parents are willing to help their kids out with cash, those loans<\/a> don’t always come without strings attached \u2014 sometimes in the form of interest.<\/p>\n Related: Gen Z Is Turning to Side Hustles to Purchase ‘the Normal Stuff’ in ‘Suburban Middle-Class America’<\/a><\/b><\/p>\n Financial media company MarketBeat.com<\/a>‘s new report, which surveyed more than 3,000 parents, found that an increasing number are charging their adult children interest on family loans.<\/p>\n “The Bank of Mom and Dad has always been generous, but even generosity comes with boundaries,” says Matt Paulson, founder of MarketBeat.com<\/a>. “What’s striking is that while most parents don’t expect repayment \u2014 and certainly not at commercial interest rates \u2014 inflation and rising costs<\/a> are starting to reshape how families think about money.”<\/p>\n The average interest rate charged by parents was 5.1%, according to the data. That’s still well below the costs their children might incur elsewhere: The average personal loan<\/a> rate is 12.49% for customers with a 700 FICO score, $5,000 loan amount and three-year repayment term, per Bankrate<\/a>.<\/p>\n Related: This Stat About Gen Alpha’s Side Hustles Might Be Hard to Believe \u2014 But It Means Major Purchasing Power. Here’s What the Kids Want to Buy.<\/a><\/b><\/p>\n Only 15% of parents would be comfortable with lending their kids $5,000 or more at one time, according to MarketBeat’s research.<\/p>\n Family loan<\/a> 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.<\/p>\n Parents in Delaware and Maine tended to be the most lenient when it came to charging their children interest on loans, with 2% and 4% rates, respectively, according to the findings.<\/p>\n Related: Baby Boomers Over 75 Are Getting Richer, Causing a ‘Massive’ Wealth Divide, According to a New Report<\/a><\/b><\/p>\n Many parents who expect repayment also have a fast-tracked timeline in mind. Twenty-one percent anticipated seeing their loan repaid<\/a> in one month, 15% within one year and just 8% more than a year later, per the survey.<\/p>\n Although 59% of parents reported being happy to help their kids with money<\/a>, 27% said they would only do it if necessary, and 4% admitted to feeling resentful.<\/p>\n In many cases, family loans don’t just provide financial support<\/a> \u2014 they’re also “emotional transactions that test trust, responsibility and family dynamics,” Paulson notes.<\/p>\n<\/div>\n As young Americans struggle with high costs of living<\/a> and salaries that haven’t kept pace with inflation<\/a>, some of them rely on loans to make ends meet.<\/p>\n Nearly half (46%) of Gen Z<\/a> between the ages of 18 and 27 depend on financial assistance from their family, according to a 2024 report from Bank of America<\/a>.<\/p>\n What’s more, even though some parents are willing to help their kids out with cash, those loans<\/a> don’t always come without strings attached \u2014 sometimes in the form of interest.<\/p>\n<\/div>\n