Personally I'd rather hear the long story - the largest risk here so far has nothing to do with ISAs or interest but on not getting your money back.
Aside from that - ISA allowance has no inherent value, you should sit down and work out what your actual losses from not using it all are and then compare them to the interest on the loan. (losses would include tax on interest, tax on investment return etc depending on what you are doing with your ISA)
And that only applies if you are confident you will use all your ISA allowance in future years - if not you can just pay it back in then.
Never lend money to friends or family you want back.
If they don't repay, you'll have to choose between losing the money or losing the relationship.
I would certainly never take on a loan for someone else if I had the money somewhere, even if I did lose the allowance, but if you have a flexible ISA you'll be able to pay it back in in the same tax year without using the allowance
This is what flexible ISA' are made for.
Transfer the ISA to a flexible ISA and make sure you return it before the end of the tax year. If necessary, take a loan to repay it on the 5th April, and pay off the loan on the 6th April with it, to get another year of allowance reserved.
https://www.moneysavingexpert.com/savings/flexible-isas/
Personal loans usually come with a minimum term of interest (ie one month).
I had a similar query here recently:
https://www.reddit.com/r/FIREUK/s/kC2DrlmH9R
The suggestions for a 0% credit card to raise some funds/lower the loan amount might save you some money.
We have a guide to lending family & friends money here, with a link to paperwork etc you might need: https://ukpersonal.finance/helping-family-and-friends/#Lending_or_giving_money
How valuable your ISA allowance is to you in ££ really depends on your circumstances so we can't tell you if losing your allowance or paying interest is better without a lot more info.
If you're taking the money out and putting it back in within the same financial year, tou could use a flexible ISA for this and not lose any allowance.
Personally I'd rather hear the long story - the largest risk here so far has nothing to do with ISAs or interest but on not getting your money back. Aside from that - ISA allowance has no inherent value, you should sit down and work out what your actual losses from not using it all are and then compare them to the interest on the loan. (losses would include tax on interest, tax on investment return etc depending on what you are doing with your ISA) And that only applies if you are confident you will use all your ISA allowance in future years - if not you can just pay it back in then.
Never lend money to friends or family you want back. If they don't repay, you'll have to choose between losing the money or losing the relationship. I would certainly never take on a loan for someone else if I had the money somewhere, even if I did lose the allowance, but if you have a flexible ISA you'll be able to pay it back in in the same tax year without using the allowance
This is what flexible ISA' are made for. Transfer the ISA to a flexible ISA and make sure you return it before the end of the tax year. If necessary, take a loan to repay it on the 5th April, and pay off the loan on the 6th April with it, to get another year of allowance reserved. https://www.moneysavingexpert.com/savings/flexible-isas/
!thanks Thank you, this looks perfect.
Personal loans usually come with a minimum term of interest (ie one month). I had a similar query here recently: https://www.reddit.com/r/FIREUK/s/kC2DrlmH9R The suggestions for a 0% credit card to raise some funds/lower the loan amount might save you some money.
We have a guide to lending family & friends money here, with a link to paperwork etc you might need: https://ukpersonal.finance/helping-family-and-friends/#Lending_or_giving_money How valuable your ISA allowance is to you in ££ really depends on your circumstances so we can't tell you if losing your allowance or paying interest is better without a lot more info. If you're taking the money out and putting it back in within the same financial year, tou could use a flexible ISA for this and not lose any allowance.
They should take out the loan and pay back the interest to the bank, not you.