Tough Love Lending: Illinois Parents Charging Grown Kids 5.6% Interest on Loans, Finds Survey.

• 3,014 parents surveyed.
• Illinois parents charging their kids interest above the national average.
• Interactive map showing parental rates of interest in each state.

For decades, the Bank of Mom & Dad has been one of America’s most forgiving financial institutions – no overdraft fees, no hidden charges, and repayment plans that stretch well beyond anything a traditional lender would dream of. But even parents have their limits.

MarketBeat.com, a leading financial media company, surveyed 3,014 parents and found that an increasing number are charging their adult children interest on family loans. The average rate for those who do? A surprisingly precise 5.1%. That’s still a bargain compared to the national average for personal loans, which currently sits at 11.25% (according to the Federal Reserve via the FRED database).

And where are parents toughest on their kids’ wallets? Nebraska and Oregon, where mom-and-pop lenders charge a hefty 6.8% on average. Illinois parents charge above the national average, at an interest rate of 5.6%. The top 5 highestest interest states are:

=1. Nebraska: 6.8%
=1. Oregon:     6.8%
3. Mississippi: 6.5%
4. Georgia:       6.4%
5. Arkansas:     6.3%

The Lending Habits of America’s Parents
Beyond interest rates, MarketBeat dug into the fine print of the family loan agreement. Here’s what parents in Illinois revealed about how they lend, what they expect back, and where emotions come into play:

How much would you feel comfortable lending at one time?

• Less than $100: 29%
• $100–$499: 26%
• $500–$999: 16%
• $1,000–$4,999: 14%
• $5,000 or more: 15%

When do you expect repayment?

• Within 1 month: 21%
• Within 6 months: 21%
• Within 1 year: 15%
• More than 1 year: 8%

Inflation and Family Finance
Half of parents say rising living costs have changed how much they’re willing to lend. For some, generosity remains untouched; for others, the purse strings are tightening.

When it comes to the emotional side of lending, the split is just as telling:

• 59% are happy to help with no stress.
• 27% say they’ll do it if necessary, but aren’t thrilled about it.
• 4% admit to feeling resentful.

And what about family drama? 14% of parents confessed that lending money has damaged their relationship with their adult children, while 86% insist it hasn’t.

Interactive map showing parental rates of interest in each state

Commenting on the findings, Matt Paulson, founder of MarketBeat.com, says: “The Bank of Mom & Dad has always been generous, but even generosity comes with boundaries. What’s striking is that while most parents don’t expect repayment – and certainly not at commercial interest rates – inflation and rising costs are starting to reshape how families think about money. In many cases, these family loans aren’t just financial lifelines; they’re also emotional transactions that test trust, responsibility, and family dynamics.”