Clearing off Credit Union Loan with family loan?

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RichieRich

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The difference between my shares and what I owe on a CU loan is 9000. I can get an interest free loan for this amount from a family member but am afraid to accept it for 2 reasons:
1. Can I be caught for some sort of gift tax?
2. Is the clearing of the loan with such an 'instant' wad of cash likely to raise a 'money laundering eyebrow' at the CU?

Obviously I don't want to break the law but so would appreciate the facts/advice please...

Thanks
 
If this is a loan that is going to be repaid then I debt it would be seen as a gift for tax purposes. I would imagine the best way to prove this is being repaid and is a loan, not a gift, is to start immediately with recorded payments (e.g. direct debit from your account to the person who gave it to you).
Also you need to bear in mind that there are thresholds on accepting tax free gifts from direct family members and if you haven't received a gift from this person before then it is below the threshold and is tax free.
I think the limit to be considered a "large" transaction is 13k but I could be wrong. Over 13k may merit more checks by a financial institution on the source of the fund but if the 9k you're getting is kosher, then there isn't anything to worry about!!! I don't know if the CU has there own internal rules on this.
 
Just an update on this. Sadly the family loan option is no longer a runner so now I'm just trying to 'manage' the loan better.
I asked the CU before (by phone, about 6 months ago) if there was anyway I could transfer some of my shares to help reduce the loan slightly - the request was refused. Thinking about putting the request in writing to the CU's credit committee? Once the shares don't fall below 25% of the loan amount I thought it was generally okay or does it depend on the policies of the particular CU?
Any other ideas as to how I might reduce the loan (And more annoyingly right now, the interest!)?
I have a grand saved but was keeping that as a rainy day fund - would it be wise to throw that off the loan?

Thanks in advance for any/all suggestions.
 
How you reduce the loan is by paying all your spare cash into it. You reduce your lifestyle costs to increase the amount you can pay.

If you want more money saving advice you need to do the money makeover thread. We don't know what you earn or what you spend so we cannot give you tips until you give us those basics.

A good starting point would be for you to look at the threads on saving money.
 
While you say the difference between your shares and what you owe is 9k you give no indication as to the share or loan balance, this will assist.
Every CU has there own policies but generally it is the case to have 25% shares to balance of loan. I think you would do well to write to them as you suggest.
Also as Bronte says u might be best to do the money makeover section where people can help you more in where you might be able to save money in order to be able to pay the loan off sooner.
 
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