MIL wants to help

[Besta]

My lovely MIL wants to pay my car loan off for me (around £15k).

Is it better to transfer the money to my account or pay the car off by MIL making a direct payment to the finance company?

What are the rules around this type of gift? Eg if she passes on within a certain no of years of giving the gift or any other rules?

Thanks :)

Bumping for morning traffic :)

I think when you make the payment, you could just use her card, couldn't you?

I would avoid her money landing in your account.

What a lovely MIL you have!

If she dies with 7 years a gift would be considered as part of her estate with the exception of such as a wedding gift or within a specific annual limit. You need to ask the loan company for a settlement figure and whether they would accept a 3rd party payment.

ImperialB - yes she's one in a million! And yes I thought that money wouldn't have to hit my account. Her reasoning is that we take her here and there etc so she's contributing to the car.

Wrt the estate - if that's the case it doesn't matter whether or not it hits our account as it'll still be considered as a gift? I don't think she's expecting to live 7 yrs more (although I very much hope she does).

I could be wrong here but are you ( with MIL) money better of paying the majority of the loan except for a couple I hundred quid and then ask for settlement? This is around paying interest.

Also why would the finance company care where the money came from. I'm only saying that as in the past I have paid off the family car when the finance was in his name and last time he gave me a lump sum to pay off our current car.

I wondered if there might be money laundering concerns if paid off by a 3rd party.

Thanks all.

Flip chart - how does that work? Would that mean I'd pay less interest overall (obvs that's the main thrust of what I want to do).

Thanks :)

My bank advised me to do this.

Say I have a loan and the balance is £15,000 and I now have the means to pay it off. Depending on the type of loan and agreement you could be about to pay it off but then they work out interest owed ( or that they would have expected to have.

So they told me to pay say £14,700 wait for that to clear and then ask for a settlement figure on your loan. Ie £300.
I'm not very eloquent at explaining but I've done this a few times. On the last time I had. a £25,000 loan over 3 years. I came into some money and was able to pay it all off 13 months later. I did as advised and my letter from the bank closing the loan stated how much I had saved.

That makes sense, thank you :)