<prompt> Human: My husbands grandmother is offering him a loan for medical school at 3-4 interest for up to 11,000 per year, and its at no interest while he is in medical school. The loan comes with a condition that we pay the full amount within four years of him leaving med school. These are very strict terms, and she has written an official legal contract that he would have to sign.We can get a government loan alternatively at 6.8 interest for the entire amount we need. It accumulates interest immediately, but we would have a much longer time period to pay it off.The family loan seems like a better deal, but Im worried about our ability to pay it off so quickly. In the four years we would be expected to pay it off, my husband would make about 40-50k annually if he graduates. Of course there is no guarantee that he will graduate and make that much. I am working towards a job that will make us 50k -100k annually during this time period, but certainty is low and I could end up making minimum wage, for all I know. We will also begin making minimum payments on another loan from his mother during this time period for 70k at 5 interest. If our career plans fall through, we will still have to pay his family loans, as his family are not the type to back down from a contract, or have sympathy if we failed at our career progressions. This could leave us in a vulnerable position. Not being able to pay it back could also damage family relationships. Doesnt the government loan offer forgiveness after a certain period of time? By the way, Ill have no loans of my own to pay off during this time period. Which loan seems like the better option?EDIT: Talked more with my husband, and he seems to think his grandmother will have more leniency in loan repayment if events happen beyond our control. Im still hesitant to deal with her though, because of negative prior experience with her deals. She made us a deal that she would pay for his med school if and only if he went to a school in our home state. After he enrolled in a home state medical school, she told us by pay, she meant she would only provide a partial loanEDIT2: We are going to try offering this deal to his grandmother: In the event that my husband does not graduate with an MD, with have 10 years to pay off the loan. If he does graduate, we get deferral during the four years after medical school in residency, with interest accumulation, but no payments due. That seems like a reasonable offer, given that this is what federal loans offer. Im not convinced that mixing finances and money is necessarily a bad thing. Either way, we have already mixed blood and money, since we are already in debt to his mother.  <response>: From your description of his family, Id avoid a private loan from them even if it cost me a little bit more. Im sure their intent is good, but it sounds like it is something that has the potential to cause extremely hard feelings for years to come. 