We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
Use of interest free loan

financeforumuser123
Posts: 2 Newbie

in Loans
My parents paid some time ago a big bill for me which was of significant benefit. They have also offered me an interest free loan which although I do not need right now I am thinking i could deposit in a savings account and return the interest I earn to my parents in gratitude for the bill they paid for me previously. My parents have no problem with the interest free loan knowing I would not use it right now. Could there be any reason that might be wrong in terms of tax or morality ?
0
Comments
-
If it is an interest free loan, what is the plan re making repayments? Are they giving it to you know for a specific purpose - just thinking if you don't need it now then maybe wait until you do - unless they are wanting to give money away for some other reason0
-
Seems unnecessarily complicated for no reason….If you don’t need it, why not just let them put it into a high interest savings account to earn their own interest.
Likewise you put whatever the monthly payment would have been in your own savings account so in future you won’t need to borrow from them.0 -
Is it a loan or a gift? Is the plan that it becomes a gift in time? Only reason I can think of is to keep it out of their estate in the futureI'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
-
Is the plan to save them tax on the interest. Possibly with a high income and having to pay over 20% or even over 40% tax on the interest.1
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 350.3K Banking & Borrowing
- 252.9K Reduce Debt & Boost Income
- 453.2K Spending & Discounts
- 243.3K Work, Benefits & Business
- 597.9K Mortgages, Homes & Bills
- 176.6K Life & Family
- 256.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards