Personal Loan App

[StillFedUp]

I think this is probably the right board....

Child No 1 is approaching the age where she will be going off to University soon. Obviously Student Loans are there to provide for the tuition fees and living costs, but I don't like them. The concept of interest being charged from day one, several years before the student would even have a chance of earning enough to pay it back combined with current high inflation rates which will result in higher student loan interest being accrued, means that the average student will already be significantly increased by the time the student graduates, let alone earns enough to start paying it back.

I know there is the possibility that the loan may be written off if not paid off eventually (but I think that is being increased to 40 years) so even an unpaid student loan becomes a millstone round the neck for almost a whole lifetime, and I have great confidence that Child No 1 will have a lucrative career and will have to pay back the loan.

As a parent who has the means to loan the student finance to Child No 1 myself, I can set far more favourable repayment terms, lower interest rates, interest free for the first four years until the student is in employment, etc. and encourage repayment as soon as she is earning a reasonable wage - not necessarily the arbitrary level set by the government (£21,000?). I could make the whole loan interest free for the whole term but I need to provide an incentive to repay it.

She has other savings from grandparents and will take control of her JISA on her 18th birthday, which itself could almost cover 3 years at University (but I would rather she keep this as a deposit for a house and drip feed it into a LISA to maximise the gains courtesy of HMRC).

So ideally I would like to find an app the we can both install on our phones whereby I can provide loans as and when required and it will manage all interest accrued, repayments, etc. and that I can set the parameters of interest rate, etc. Surely someone must have produced such an app by now. I could do it with Excel but it would be more seamless if I can find an app for our phones. This would at least document the loan which would be a halfway house between an informal agreement and having a legal agreement drawn up to ensure that she doesn't 'forget' that it was a loan rather than a gift.

Anyone come across anything like this?

TIA

SFU

[Dod101]

I think this is probably the right board....

Child No 1 is approaching the age where she will be going off to University soon. Obviously Student Loans are there to provide for the tuition fees and living costs, but I don't like them. The concept of interest being charged from day one, several years before the student would even have a chance of earning enough to pay it back combined with current high inflation rates which will result in higher student loan interest being accrued, means that the average student will already be significantly increased by the time the student graduates, let alone earns enough to start paying it back.

I know there is the possibility that the loan may be written off if not paid off eventually (but I think that is being increased to 40 years) so even an unpaid student loan becomes a millstone round the neck for almost a whole lifetime, and I have great confidence that Child No 1 will have a lucrative career and will have to pay back the loan.

As a parent who has the means to loan the student finance to Child No 1 myself, I can set far more favourable repayment terms, lower interest rates, interest free for the first four years until the student is in employment, etc. and encourage repayment as soon as she is earning a reasonable wage - not necessarily the arbitrary level set by the government (£21,000?). I could make the whole loan interest free for the whole term but I need to provide an incentive to repay it.

She has other savings from grandparents and will take control of her JISA on her 18th birthday, which itself could almost cover 3 years at University (but I would rather she keep this as a deposit for a house and drip feed it into a LISA to maximise the gains courtesy of HMRC).

So ideally I would like to find an app the we can both install on our phones whereby I can provide loans as and when required and it will manage all interest accrued, repayments, etc. and that I can set the parameters of interest rate, etc. Surely someone must have produced such an app by now. I could do it with Excel but it would be more seamless if I can find an app for our phones. This would at least document the loan which would be a halfway house between an informal agreement and having a legal agreement drawn up to ensure that she doesn't 'forget' that it was a loan rather than a gift.

Anyone come across anything like this?

TIA

SFU

I understand the basic point that you make, but you come across as wanting to retain some sort of control on your daughter's finances, for her own good of course. Not sure that that is really a very good idea, especially when you are wanting to have an app on both yours and her phone so that you can 'provide loans as and when required' and that you will 'set parameters of interest rate etc.' She needs to be given the freedom to learn about finance herself. She is about to leave the nest you know?

Dod

[StillFedUp]

I think you've misunderstood.

I don't want to retain any control over her finances. I will offer her an alternative to the Student Loans system, which will be far more favourable to her. One example is that I would charge zero interest until she graduates and then a fixed interest rate (that she would have agreed to at the point of taking up the offer). It is up to her whether she wishes to take up the offer.

I want a soft reminder that it is a loan rather than a gift and that it will be paid back and a method of tracking the loan status. If she wants to overpay/pay it off in full at any time then that would be entirely up to her. She could cash in her JISA if she wants to do so but I would advise against it.

What do you want me to do? Offer nothing and point her in the direction of the Student Loan which will saddle her with far more debt for decades to come?

SFU

[kiloran]

Your requirements do seem rather niche.
I would think a spreadsheet solution might better suit your needs. Maybe cloud-based such as Google Docs or OneDrive so that you can both see it. You can control if the document is editable or read-only,

--kiloran

[gpadsa]

A potential starting point if going the spreadsheet route:
"Variable Loan Amortization Spreadsheet"
https://www.mdmproofing.com/iym/product ... ation-var/

gpadsa

[TUK020]

I want a soft reminder that it is a loan rather than a gift and that it will be paid back and a method of tracking the loan status. If she wants to overpay/pay it off in full at any time then that would be entirely up to her. She could cash in her JISA if she wants to do so but I would advise against it.

Track it with a spreadsheet, and given her an annual statement.
You could then offer to sit with her and model differing levels of repayment in the same spreadsheet