Want to borrow £4000 - advice needed

sirius60

Hi I’m looking to get a loan of £4000 and need some advice. I’m having my house refurbished I’ve already spent £14,000 but there are just a few more things that need to be done for it to be complete and no more work needed.

As I’ve been a member of Abbey forever I saw on this site that they are currently offering a low interest rate so I applied over the internet for a loan of £4000 over 36 months. Today I received the paperwork but was surprised to see that the APR is +24.90% (don’t know what the + means) This seems like a lot when they are advertising 8%.

For the last two years I’ve been playing the keep as much of my money to myself as possible game and after reading some of the advice in these forums I’ve been purchasing on % on purchase credit cards – banking what I’ve spent in my ISA’s and Icesave (opppps nearly got caught out there) and then paying the cards off as they come due.

I’ve currently got an outstanding debt of £3000 on my MBNA credit card that becomes payable in April and have that sat in an ISA.

I’m also a member of the local credit union. I tend to have what I call a running luxuries loan from there – I feel like the borrowing from the credit union is as much about supporting a community organisation as having a loan. I always have as much or more in shares (savings) as loan and so feel like that’s covered.

So I’m wondering what would be the cheapest way of raising the £4000 – I could take up the loan from Abbey (not at that interest rate) I’ve got a priority loan application letter from Black Horse, so I could see how much they would charge for the loan.

The other option I thought was maybe move the credit card debt onto another card – 0% on balance transfers. Pay off each month what I would if I had the loan from Abbey. At the end of the 0% period my loan would be finished at the credit union I could then borrow the outstanding amount from there.

All advice would be very much appreciated.

Rafter

sirius,

For some reason abbey see you as a high risk. Have you recently moved, changed jobs etc? They might also be scared about the amount of debt you have on cards, but it doesn't seem unreasonable.

Generally lenders offer the best rates for loans above £5000 so you might be best applying at that level.

I'd also suggest, since you have savings as well, that you look at a flexible loan from say the post office so you can repay it faster if required.

Good luck

R.