Is Columbia Sticker worth if I can get an interest-free loan from family?

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
QContinuum

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Re: Is Columbia Sticker worth if I can get an interest-free loan from family?

Postby QContinuum » Tue Aug 14, 2018 1:29 am

hoos89 wrote:
QContinuum wrote:
kgm1990 wrote:Just a heads up, there's no such thing as a 'no interest loan'... the IRS will require that you give some sort of interest on top of that principle amount. You know... unless you plan on lying about it being a loan on your taxes (or he does too). :shock:


The IRS cannot (and does not) prohibit folks from extending interest-free loans, and cannot (and does not) require folks to pay interest.


https://investinganswers.com/financial- ... terest-530


It's absolutely true that extending an interest-free loan can (does) have tax consequences for both the giver (in this case, imputed interest) and the recipient (imputed gift). But that doesn't make the loan not interest-free. In the example at the link, the IRS isn't forcing the son to actually pay his parents $2000 interest.

SFSpartan

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Re: Is Columbia Sticker worth if I can get an interest-free loan from family?

Postby SFSpartan » Tue Aug 14, 2018 6:12 pm

Imputed interest aside, I don't think this arrangement makes Columbia worth it. OP is going to tie himself up financially for years. As well, taking money from family carries all sorts of relationship considerations, and OP likely could go to a lower ranked school on at least a partial scholarship. Seems like a pretty obvious choice here.



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