What interest rate would you charge your family?

bris

hayton2k3 wrote: »

why should he miss out on the interest he WOULD earn if he never lent her it?

Because it's his mum.

The problem you have, and I have been there, is that by lending the 10k to your mum it's not regestered anywhere as a loan. As far as the CC are concered they have a good un here and will once again throw credit at your mother, so the big queston is can she resist the temptation to do it all again, most can't.
I had the same problem with my in laws, got them clear with a remortgage etc only to see them back in the same position a year later. Sometimes it's better just to help them with the debt thy are in rather than clearing it for them.

Degenerate

The funk of self-righteousness permeating through most of the replies in this thread is so overpowering it's nauseating.

Evidently, everyone thinks a low-income student should give their higher-earning mother £320+compounding a year towards paying off debts she ran up through irresponsible spending? That's basically what you're saying, when you say that he should lend her the money without charging any interest. That's the money he would be losing by helping his mother in this way.

Faced with this choice, no-one could really blame him for simply not helping at all, when his mother would be so much better off paying £320 a year to him than £2000 a year to financial institutions.

You people cannot think logically. He has the power to help in a way that would leave his mother much better off, but you're basically telling him that to help in a way that doesn't leave him out of pocket is somehow immoral.

Gromitt

Maybe you could work it another way:

"I'll give you 1K per month to pay off debts as long as no new debts appear"

In return you could agree something like cheap rent and food (assuming you live with your mother), saving you much more than £300/year (typical 3% interest on 10K). Since a typical rent is £400+ per month, I'd say this was a bargain for the both of you.

Charge her money? No way. I very much doubt she has given you an invoice for each month you have stayed with her, so you shouldn't be charging her either!

If she stated that she wanted to pay me back, I'd simply reply "Ok, as and when you can".

ess0two

berbastrike wrote: »

Yes I know and the idea of charging her interest is weird and wrong. But compared to the current situation, it is miles cheaper for her. (20%+ vs 3.2%).

I hope she says shove when it,when you offer the payment options,get real.

Wutang_2

Degenerate wrote: »

The funk of self-righteousness permeating through most of the replies in this thread is so overpowering it's nauseating.

Evidently, everyone thinks a low-income student should give their higher-earning mother £320+compounding a year towards paying off debts she ran up through irresponsible spending? That's basically what you're saying, when you say that he should lend her the money without charging any interest. That's the money he would be losing by helping his mother in this way.

Faced with this choice, no-one could really blame him for simply not helping at all, when his mother would be so much better off paying £320 a year to him than £2000 a year to financial institutions.

You people cannot think logically. He has the power to help in a way that would leave his mother much better off, but you're basically telling him that to help in a way that doesn't leave him out of pocket is somehow immoral.

Happy Christmas moron

Degenerate

Wutang wrote: »

Happy Christmas moron

Thank you for such a reasoned and logical contribution to the debate.

Wutang_2

Degenerate wrote: »

Thank you for such a reasoned and logical contribution to the debate.

My pleasure fool, can I also add I watched "The funk of self-righteousness" live and they were average at best.

Gromitt

Thinking about this for a minute, if anyone did this (not just the OP, and not just to family members), how would people stand legally as regards HMRC? Surely the income must be reported?

opinions4u

Evidently, everyone thinks a low-income student should give their higher-earning mother £320+compounding a year towards paying off debts she ran up through irresponsible spending? That's basically what you're saying

I never said that. I don't think that. Others have posted advice not to give the money at all.

YorkshireBoy

Gromitt wrote: »

Thinking about this for a minute, if anyone did this (not just the OP, and not just to family members), how would people stand legally as regards HMRC? Surely the income must be reported?

Not an expert but...

It's not strictly an income. There's a repayment of capital (the £10K), and anything else (£320 a year lost ISA interest) could be termed a 'gift' (£3,000 per year is allowable I believe, but that's for IHT purposes etc?).