Charging interest on a loan is important because it sets up the agreement as something other than a gift or a handout, and can also account for inflation. The interest rate for a personal loan to give should be determined by the length of repayment and any national government approved interest rates for family loans (if any). The annual limit for tax-free gifts to family members in Australia is $14000, so especially when you loan is beyond that, should you charge interest.

Comment on this FAQ

Your email address will not be published. Required fields are marked *