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make money from a loan????

carpy
carpy Posts: 1,083 Forumite
First Anniversary First Post Name Dropper
in Loans
hi all

with some loan rates at all time lows is it possible to make a profit form them by sticking them in a high interest account?

northern rock offer a fixed 5.8% upto 25k and there are some bond/term savings account over 6% so surely it's possible to make some profit?

i'm new to this so i might be overlooking something?

regards
dave
???

Comments

  • Woby_Tide
    Woby_Tide Posts: 5,344 Forumite
    Combo Breaker First Anniversary First Post
    tax probably, and having to repay the loan so you can't lock all the money away long term
  • DiggingOut
    DiggingOut Posts: 770 Forumite
    I suppose if you are married and your spouse isn't a taxpayer you could get the savings tax-free. But you would have to be able to make the loan payments without the savings, because the savings would be tied up to get that kind of a rate.
    I have five stars! This doesn't mean that I know anything about any of the things I post. I could be a raving lunatic, or a brilliant genius, or just some guy on the internet. In fact, I could be all three at the same time.

    If anything I say makes sense, then do it. If not, don't. Don't blame me or my stars if you do something stupid because I suggested it. I'm responsible for my own stupidity only. You are responsible for yours.

    Why, I don't even have five stars anymore! Aren't you glad you aren't responsible for my stupidity?
  • Sooler
    Sooler Posts: 3,110 Forumite
    First Anniversary Combo Breaker First Post
    One way is to get a credit card which has a 0% rate for a period and which also allows a super balance transfer - where the credit card co. just transfers money into your bank account - which you then invest. Just pay back the minimum amount each month to the credit card co. until just before 0% rate ends. Then withdraw the cash from your investment and pay off the credit card in full - within the 0% period else you'll be stung for interest. You keep all of the interest earnt from the investment.

    Check out Martins article here
    http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1085355871,12390,
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