What would be best for me?

schuey87

I would like to borrow about £500 - £600. Whether it makes any odds or not, the reason I want to borrow the money is to help pay for my skydiving rig. I would be looking at paying it back within 8-10 weeks. What do you think is the best option for this? A personal loan.... or an overdraft of some sort? Can you only get monthly repayments on a personal loan? Say that you had a 3 month loan, could you pay it all off after 2 months or even 1 month if you don't spend so much during that month and find you can afford to?

How would an overdraft work in such a situation? I have no idea really how it works! Say you get to the end of the month and you owe a £500 overdraft to the bank. Then you get paid £900 at the start of the month so you'd go to £400 positive balance. Then say you used £650 that month, so you went to -£250 balance on your overdraft by the end of the 2nd month. At the start of the 3rd month you got paid and went positive balance and don't go into the overdraft again. How much interest would you have to pay on that and when?

Again whether it makes any odds I bank with Natwest and have the Advantage Gold Current Account.

magentadreamer

Do you have an overdraft facility with your bank? Unauthorised overdrafts can end up with you being stiffed for fee's interest etc. If you do have an overdraft limit with them and know that you definetly are going to have the money in 2 months time to pay in I'd suggest that as a short term fix -but don't do it if it's gonna be longer. Do you have a credit card at all?

Interest tends to vary from bank to bank so ask before you borrow on one and on an unauthroised O/D they'll really stiff you. I pay interest if at all monthly.

angelica

Check with Natwest, with the account like Advantage Gold there should be a free overdraft facility of about £250, they should not charge you any interest for using it(but you need to agree it first, contact your branch).If you use more than that you will pay interest on the whole amount.

schuey87

Ok thanks Angelica, so in the situation I mentioned above borrowing 500 paying 250 back after 1 month then 250 back after the 2nd month, how much interest roughly would I have to pay do you reckon?
What if they didn't agree to a 500 overdraft, but I did it anyway? lol. would i be able to do it anyway or would i be stopped, or would i be able to do it but then get wacked with a huge amount of interest?

grumbler

schuey87 wrote:

.... so in the situation I mentioned above borrowing 500 paying 250 back after 1 month then 250 back after the 2nd month, how much interest roughly would I have to pay do you reckon?

http://www.natwest.com/personal/services/currentaccounts/index.asp?navid=PERSONAL/ACCOUNTS_SERVICES/CURRENT_ACCOUNTS/ADVANTAGE_GOLD
I don't see anything about £250 interest-free overdraft here. For agreed overdraft interest rate is 0.75% p.m. £500*0.75%+£250*0.75%=£5.63

What if they didn't agree to a 500 overdraft, but I did it anyway? lol. would i be able to do it anyway or would i be stopped, or would i be able to do it but then get wacked with a huge amount of interest?

View the Current Account rates and charges:

Fees for overdrafts you have not arranged

If you exceed your arranged overdraft facility or if you go overdrawn without prior arrangement you will be charged a Ј28 Unarranged Borrowing Fee per charging period as detailed below. Additionally you may also pay the following charges:

• Unpaid fee - Standing Order, Direct Debit or Cheque - Ј38 for each item we do not pay
• Card Misuse - If you use your NatWest Servicecard, Cashcard or Cheque Guarantee card when there are insufficient funds in your account, we will charge you Ј35 for each item we are obliged to pay
• .....

Anarranged borrowing interest rate is 2.19% p.m.

angelica

Oops did they changed the rules again? It is now for Premier account holders only, sorry.

The link is http://www.natwest.com/personal/services/currentaccounts/index.asp?navid=PERSONAL/ACCOUNTS_SERVICES/CURRENT_ACCOUNTS&pid=rates

Advantage Premier
If you use your agreed overdraft by up to £250 you will not be charged any interest.

chilli_dog

off topic slightly but,

nothing fills me with more fear than jumping out of a plane and hoping a large sleeping bag slows me down enough to land alive!!

you guys are nuts.

anyway hope you sort out the finances!!

If it was me i'd buy two (just in case)

BWZN93

Nationwide's overdraft rate is 7.7% so that might be a cheaper option. You'd need to have an account there obviously!

HTH

Jo xx