Historical Interest Rates

izoomzoom

I wonder if anyone would assist me please.

In July 2015 my parent loaned a large sum of money to a relative.

Relative took a while to start paying back the money, and I'd say that 90% of the capital has now been repaid.

The relative said they would pay interest, and I've calculated that the interest rate offered was 2.4% (at time of loan in July 2015). Any source on what this could have been based on?

Also I'm sure interest rates went down, so where can I find a source to base interest rates on for the years:
2016, 2017, 2018, 2019, 2020 and 2021.

Many thanks

[Deleted User]

The rate would have been based on what your parent wanted.

It's unlikely they linked the rate to any underlying rate.

For more information, you'll need to ask the parent.

mcpitman

izoomzoom said:

Also I'm sure interest rates went down, so where can I find a source to base interest rates on for the years:
2016, 2017, 2018, 2019, 2020 and 2021.

Many thanks

Bank of England website has downloadable historic Base rates.

Ebe_Scrooge

It's easy enough to find out historical BoE Base Rates : https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp

But, as ZX81 says, that means very little.  A lender can set whatever interest rate they like - mainstream lenders tend to charge base-rate + x% at the time the loan was taken out, payday loan companies charge much much more.  So yes, it just depends on what rate was agreed between the two parties at the time.

Edi81

Surely the extra is to compensate your parent for the risk they took. This should be declared in their tax returns. 

LaHostessAvecLaMostess

izoomzoom said:

I wonder if anyone would assist me please.

In July 2015 my parent loaned a large sum of money to a relative.

Relative took a while to start paying back the money, and I'd say that 90% of the capital has now been repaid.

The relative said they would pay interest, and I've calculated that the interest rate offered was 2.4% (at time of loan in July 2015). Any source on what this could have been based on?

Also I'm sure interest rates went down, so where can I find a source to base interest rates on for the years:
2016, 2017, 2018, 2019, 2020 and 2021.

Many thanks

Unless you have a signed agreement, and a license to lend as a consumer creditor I'd be happy to receive the capital back and nothing more.

The alternative is that they report you do the FCA for lending money without a licence and you get nothing more because you have no real agreement.

Exodi

izoomzoom said:

I wonder if anyone would assist me please.

In July 2015 my parent loaned a large sum of money to a relative.

Relative took a while to start paying back the money, and I'd say that 90% of the capital has now been repaid.

The relative said they would pay interest, and I've calculated that the interest rate offered was 2.4% (at time of loan in July 2015). Any source on what this could have been based on?

Also I'm sure interest rates went down, so where can I find a source to base interest rates on for the years:
2016, 2017, 2018, 2019, 2020 and 2021.

Many thanks

I share @LaHostessAvecLaMostess views that they should be thanking their lucky stars that they received the capital back in the first place - this forum is littered with broken relationships when people realise these agreements aren't enforceable.

If they are keen to pay interest, BoE rates are as follows -

5th Mar 2009:  0.50%
4th Aug 2016:  0.25%
2nd Nov 2017:  0.50%
2nd Aug 2018:  0.75%
11th Mar 2020:  0.25%
19th Mar 2020:  0.10%
16th Dec 2021:  0.25%

If you were to truly mirror a loan, the interest should only be applied to the amount owed at the time.