Hi Dudley
1) You can pay off part of the loan. You don't need to pay off the full loan.
2) If you have €30k in a current account earning nothing which you will not need, then you should pay that off your parents' loan. It will save them €900 a year.
3) If you do that, then you should make sure that you do a written agreement on how the loan is to be repaid and whether you should get interest or not.
4) If you have your own mortgage on which you are paying 3% interest, it would make more sense to pay off your own mortgage first.
5) You should not borrow to pay off the remainder, unless you can borrow at a rate well below 2%, which I assume you can't.
6) While the break-even point is 3%, it's not worth the hassle for 1%.
Brendan