Use of interest free loan

financeforumuser123

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 ?

Flugelhorn

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 reason

DrEskimo

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. 

silvercar

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 future

badmemory

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.