Laws against giving family members your personal loan?

Benc98

Hello, I've recently passed my driving test and looking to get a car but because I don't have enough saved to buy car insurance and tax everything else at the moment but really need a car because I've got a new job that would require me to travel. I am only 20 but my mum doesn't want me to take out a personal loan and she would rather do that and give me the money, because my mum (god only knows how she does it but has never been in debt once in

Benc98

(I can't find how to edit the post so I'm going to carry on here)

Her life and has an excellent credit score with being a house owner and other stuff) and I'm young so she doesn't want me to risk missing payments and stuff, so it's easier for me to just set up a direct debit to her and do it that way. As she can get a much lower interest rate than me, it makes more sense.

However, the only problem I have is that will she run into law problems if she gives me the loan? I don't want my mum getting in trouble for it obviously.

boo_star

If the mother tells the lender that she intends to give the money to someone else then there's no problem.

If she lies about the reason on the application then she'll be committing fraud.

Benc98

Her loan would be coming from her current account bank which is lloyds, in the reasons for loan one states 'pay off family member/relative' would this be the option we would have to input?

glennstar

Who will be the keeper of the vehicle? If she is then she doesn't need to say anything to the lender, she is borrowing money to buy a car which will remain in her name... not that the car being in her or your name is actually material to a personal loan.

To be honest, I think your bigger issues are related to the insurance. Have you really done your homework here? When you say you'll need your car for work, are you traveling to and from work or using the car for work. If it's the latter make sure you tell the insurer. If you are thinking that your mum will be the main driver and you are named then the answer to the usage is all the more important.

Whatever you do, do NOT lie on any of the application forms, especially the insurance one, at 20 you are too young to have an insurance refusal or insurance fraud conviction which goes on a database that all insurers share (unlike the way CRAs work) and you will struggle to get cover in the future.

sourcrates

The loan is not a problem, many parents take out loans for there kids.
Just dont go mad with your choice of vehicle, at your age, insurance is astronomical, you also need to budget for servicing/maintenance costs as well, tax, you can pay monthly if you wish.

foxy-stoat

Benc98 wrote: »

However, the only problem I have is that will she run into law problems if she gives me the loan? I don't want my mum getting in trouble for it obviously.

As long as she doesnt lie she wont be breaking any laws.

spanish_inquisition

Benc98 wrote: »

Hello, I've recently passed my driving test and looking to get a car but because I don't have enough saved to buy car insurance and tax everything else at the moment but really need a car because I've got a new job that would require me to travel. I am only 20 but my mum doesn't want me to take out a personal loan and she would rather do that and give me the money, because my mum (god only knows how she does it but has never been in debt once in

Keep transparent and then things generally won't go wrong!