Loans between Parents and Children
Other Private Lending Choices
Although most private lending takes place between people
who know each other - parents and children-
there is no requirement for this to be the case.
In the last few years, a number of websites have sprung up that offer private loan services.
They work by allowing people with savings to act as small-scale lenders.
Borrowers are credit checked and given a credit rating. They can then apply for the loan that they want, choosing its size and duration.
This loan is then available to the lenders, who can have the loan allocated to them and lend the money if they are happy with the terms and conditions.
Because of the very low overheads of these websites, both lenders and borrowers tend to get quite competitive rates of interest - although there is no guarantee that you won't be able to do better on the high street.
It's also worth noting that lenders do run the genuine risk of losing their money if the borrower defaults on their payments - although careful credit rating provides some protection against this.
To learn more about Inheritance tax and loans, visit the HM Revenue & Customs website.
Be warned - it can be a complex area and you may need to take expert advice.
Read on Loans
between Families / Parents and Children
All This About Tax
between Parents and Children / Other Private Lending Choices