APR the same as RPI

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mad2477
mad2477 Posts: 4 Newbie
edited 15 October 2017 at 10:42AM in Loans
Been thinking about buying a car and need to consider finance

I think I've got a plan to get a loan that is in real terms actually no interest.

An APR that is the same as RPI (and maybe soon might be less than it!)

Quote for a loan from Sainsbury's Bank = 2.8%

Price match promise from Nationwide (beats other quotes by 0.5%)

Loan APR offer from Nationwide = 2.3% = RPI

Is my logic flawed? Is this a good time to be thinking of getting a loan?

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  • Nebulous2
    Nebulous2 Posts: 5,116 Forumite
    First Anniversary Name Dropper First Post
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    That is about as cheap as a personal loan has ever been. As long as you get accepted by both companies.

    Don't get hung up on RPI though. It's a trailing indicator based on a basket of provisions which may be close or far from what you buy. Most food for instance is running well ahead of RPI.

    Of more interest to you should be affordability and the prospect of your income increasing.
  • antrobus
    antrobus Posts: 17,386 Forumite
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    mad2477 wrote: »
    ...

    Is my logic flawed & therefore is this a good time to be thinking of getting a loan?

    A bit.

    August 2017 RPI was 3.9%. CPI was 2.9%
    Nebulous2 wrote: »
    ...
    Don't get hung up on RPI though. It's a trailing indicator based on a basket of provisions which may be close or far from what you buy. Most food for instance is running well ahead of RPI.

    No, Food and non-alcoholic beverages is running at 2.1%, which is well behind RPI.
  • mad2477
    mad2477 Posts: 4 Newbie
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    perfect - fingers crossed i get accepted then the other matches!
  • Sarastro
    Sarastro Posts: 400 Forumite
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    If you had a savings account that paid the same interest as RPI, then your money would be standing still - it would be worth the same amount in the future as it is worth now. But you have a loan and effectively what you're saying is that the total debt you pay back in the future would purchase the same amount of goods that it would purchase in today's money so effectively it's interest free. I suppose that's logical but to be honest, I think you should be trying to get the lowest rate possible and make sure you can afford the repayments. There are still some interest free credit card deals about which might be a better way of borrowing some or all of the money.
    Debt 1/1/17 - Credit Cards £17,280.23; overdrafts £3,777.24
    Debt 5/1/18 - Credit Cards £3,188; overdrafts £0
  • mad2477
    mad2477 Posts: 4 Newbie
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    If only my credit card limit(s) was as much as I wanted to spend! Is it possible to pay alittle cash, alittle on one card & alittle on another?

    Sounds a bit odd but I wanted a nice car for so long and I saved and saved and saved so now I have the money to cash buy it I don't to part from my bank balance!

    I quite like having the dollars there (albeit hanging around in a S&S isa) and coupled with loans that are relatively cheap atm/I'm wondering if its actually more sensible to let the bank's money depreciate...
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