withdrawing from ISA - Better than taking on a loan?

mr-mad_2

Due to having her car written off my partner needs to buy a new one.

She needs approx £2,500 to buy a replacement after receiving payment on her old car.

She has an ISA taken out this year, which I believe is with Nationwide.

Is she better off removing some cash from the ISA instead of taking on a loan?

sheslookinhot

mr-mad wrote: »

Due to having her car written off my partner needs to buy a new one.

She needs approx £2,500 to buy a replacement after receiving payment on her old car.

She has an ISA taken out this year, which I believe is with Nationwide.

Is she better off removing some cash from the ISA instead of taking on a loan?

I guess the difference could be upward of 5% between interest on ISA and loan. As long as she has some cash to cover emergencies then my view would be yes, remove cash from ISA.

BenL

My cash ISA with Natwest is 3.5% but on the right side of the screen you cans ee a link for the best balance transfer card with MBNA.

This offers money transfer to your bank accoutn at 1.9% for a year.

I've done this for the final payment of my car instead of withdrawing the savings as i had originally planned.

Gives me another year anyway to save more

gwapenut

mr-mad wrote: »

Due to having her car written off my partner needs to buy a new one.

She needs approx £2,500 to buy a replacement after receiving payment on her old car.

She has an ISA taken out this year, which I believe is with Nationwide.

Is she better off removing some cash from the ISA instead of taking on a loan?

I view my cash ISAs as alternative retirement, always funding the max each year, and this if I withdraw one year, I view the loss as permanent - losing the good tax free interest year after year. I make more on my ISAs than I pay on my mortgage, so it is an ongoing yearly loss.

When I purchased my car I took out a "0% on purchases for a year" credit card, and agreed to split the card handling fee with the car salesman. I paid a 1% handling fee, which got me a year's interest-free credit and 1% back in "card loyalty points" - ie it cost me nothing. Typically you may expect to pay a 2.5% fee, thus it costs you about 1.5% after gettnig loyalty points back.