Each in our family is capable of getting loans, but our family believes that we can avoid paying interest to a third party and keep the money in house. However, our family also invests in each other's companies, and one family's success is all of our success. It kind of branches out that way and I'm really happy we've made this arrangment. My MIL carries my school loans, though I put them through the federal government first, she paid them and I pay her. I would rather pay interest to someone I know than some ephemerial entity.
However, my sister is is still young and bought a car from said MIL, made poor choices, and is not paying it off properly. But I have NO problem telling her time and again that she needs to make her monthly payment.
If I were you? I'd just send little monthly reminders via email or in the mail, printed through quickbooks or something. I'd tack them on their front door if necessary. Every check you get towards the loan, send your relative a box of chocolates or a flower or something. A new movie. Some petty little "thank you" incentive. They ARE your family, after all.
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