Supreme Court rules students must continue to pay their student loans. Consider an Intra-family loan to pay off student loan debt using ZimpleMoney’s loan management features.
The Supreme Court ruled 6 to 3 Friday that President Biden exceeded his authority with a plan to forgive more than $400 billion in federal student loan debt, a policy that stood to benefit more than 40 million Americans. The controversial debt-relief plan drew legal challenges shortly after it was unveiled last August, and it had been on hold since November after rulings in two cases. The plan would have eliminated up to $20,000 of federal student debt for borrowers earning up to $125,000 annually, or up to $250,000 for married couples.
Using ZimpleMoney to facilitate an intrafamily loan for paying off your student debt is a straightforward process.
Here’s a step-by-step guide to help you proceed:
- Register on ZimpleMoney: Visit the ZimpleMoney website and sign up for an account.
- Set Up Loan Details: Once your account is created, set up the loan details. Define the loan amount, interest rate (if any), repayment schedule, and any other terms you and your family member(s) agree upon.
- ZimpleMoney provides calculators and payments tools to customize your loan.
- Invite Family Members: Send loan invitations to those family members who have agreed to lend you money to pay off your student loan.
- Execute a Note to Formalize the Loan. Keep it simple, there are sample documents at ZimpleMoney and readily available on the internet or services like Rocket Lawyer and others.
- Once you receive the loan proceeds from your family members, pay off your student loan.
- Then start your repayment plan with your family and make payments through ZimpleMoney. You can do so with automatic payments or manual payments.
- Communication: Maintain open communication with your family member(s) throughout the repayment process. If any changes or adjustments are needed, discuss them and update the loan agreement if necessary.
- Record Keeping: Keep records of all loan transactions, including payments made and received, for your financial records. ZimpleMoney should have tools to help you track this information.
- Comply with Tax Regulations: Be aware of any tax implications related to the intrafamily loan. Depending on the amount borrowed and the interest charged (if applicable), there may be tax considerations for both the lender and the borrower. Consult with a tax professional if needed.
Remember that a formal loan agreement is essential to protect all parties involved and to avoid misunderstandings or conflicts in the future. It’s essential to treat this intrafamily loan as seriously as you would any other loan from a traditional financial institution.
Family member lenders may also consider gifting portions of your principal payments every year up to the maximum limits allowed by the IRS. Gifting allows each lender to give up to $16,000 a year.
Whatever you may decide or explore, always consider consulting a financial advisor or tax professional to ensure that the approach you’re taking aligns with your overall financial goals and situation.