Loan to Family
You're three things to think about in order of importance are:
1. Ensuring you don't fall out of it all goes Pear Shaped.
2. Finding a fair way of structuring the Loan so that both sides get Value from it. Many family Loans are interest free, but for such a large amount this wouldn't really be fair, particularly if spread over a long period, imaging the family member gets an investment opportunity in 12 months time but can't because you have their money. You need to compensate them for losing control of their money until it's paid back.
3. Tax Issues.
The solution to these is as follows in my opinion.
1. Write down what you agree, if you agree to pay x every week/month or whatever, then write that down, it doesn't have to be in legal language, just something you both agree on the meaning of.
If you offer something as collateral write that down, etc. If you have to pay a penalty for a Late or missed payment agree that.
2. In order to work out a fair way of paying interest a simple thing would be to go to some of the Bank Websites with Loan calculators, type in 20K over various periods of time to see what you'd be paying in the market and then agree with your relative how much you would be expected to pay.
I'd advise against interest free, even though financially it's a great deal for you, it can lead to resentment, especially if you miss even one payment.
3. I don't think you need worry about Tax issues, the amount of profit will be relatively small, and infact the "interest" could be treated as a gift from you to your relative and would probably fall beneath the threshold, although I might be advising you to break the law here so look into it for yourself.
Finally, since you are the borrower I'd advise you be generous in the Terms of the deal and dilligent in sticking to them. If this relative is willing to loan 20K then their friendship is certainly worth more than that, so don't muck it up.
Good luck.
-Rd