Dear Ann Landers,
have four children who are successful in their marriages and careers. I have always tried to treat them in an even- handed way when it comes to matters such as college tuition and loans for home purchases. It has been my policy to charge a modest rate of interest for the loans in order not to favor one child over the other. Recendy, my oldest daughter asked for a two-year loan to help fi-nance a larger home. Both she and her husband have good jobs, but they wanted to avoid using non-liquid assets. In making her request, my daughter said she had never felt that a parent should charge inter-est and she wanted her loan to be interest-free. This made me uncom-fortable, but I agreed to the loan and said I would consider making it interest-free. Shortly after, my daughter called to ask for the money. As in the past, I mailed her a check accompanied by a note to sign and return to me. That note was an agreement to pay interest. I included a repayment schedule. To my surprise, she cashed the check and returned the note with the reference to interest crossed out. Subsequently, she has been making her monthly payments to me on principal only. In a recent visit to her home, my daughter and I discussed the situa-tion, but we were unable to resolve the issue. She contended that I had encouraged her to believe I would not be charging interest. I told her I was sorry about the misunderstanding, but my position should have been clear when she received my check and the note requesting her signature. Is my loan policy unreasonable? How would you handle this? -Carl in Akron

Dear Carl,
For openers, I would never charge a child of mine inter-est on a loan. Since it is your money, however, you have every right to do with it whatever you wish. Apparently when you told your daughter you would consider her re-quest to get the loan without interest, she assumed you had agreed to honor her request. She should not have crossed out the reference to the interest, however, without checking with you to make sure her as-sumption was correct. Since it is your policy to charge your children interest on loans, this young woman should pay it, just as the others have.