Interest-free loan

Borrowing tax-favorable money and also borrowing money from family or to family. An interest-free loan can be the solution.

An interest-free loan can be provided by family. Since it is difficult to borrow money for students (student loan), family can offer a solution.

The money is lent at 0% interest, a contract must be drawn up and it must state that the amount is immediately due and payable. After completion of the study, the loan amount can be forgiven or repaid little by little.

Please note that the borrowed amount is always due and payable and that this debt can actually be paid off if the tax authorities make inquiries about this.

A private deed is usually sufficient, reporting to the tax authorities is advisable. Also ask for advice there, since it is their profession, they know all the ins & outs and of course they are happy to help you further.

Advantages and disadvantages of an interest-free loan

Pros
  • Since no money is donated, you do not have to pay gift tax. The principle is that the loan can and will be repaid.
  • A debt arises in BOX 3. This can be beneficial in some cases.
Negatives
  • The loan amount must always be repayable. Quite difficult, because you borrow money precisely because you do not have it.
  • The provider of the loan will be charged with a so-called wealth tax while they have lent the money.

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