Can anyone give me any advice re: credit card/loan apps?

angelfire

Basically, my boyfriend wants to buy a car and borrow 10k. According to Martin's latest article, the cheapest way to do this with some, but minimal hassle is to take out a flexible loan for the whole amount, pay it off with a low percentage for life o balance credit card. Is this correct?

I've never even had a credit card and don't completely understand how this all works. All i do know is that if i let my boyfriend sort his loan out for himself, we'll end up paying way too much!

Can anyone explain in laymans terms how this all works?

ANY help whatsoever would really be appreciated!

Dee

grumbler

!!!!!! wrote:

Basically, my boyfriend wants to buy a car and borrow 10k.

I'd advise your bf to buy something cheaper if he cannot save for a car and doesn't know anything about loans.

According to Martin's latest article, the cheapest way to do this with some, but minimal hassle is to take out a flexible loan for the whole amount, pay it off with a low percentage for life o balance credit card. Is this correct?

Where did you read this? Why to take a loan first? It is not easy to to 'pay it off' with a credit card. At least not easier than to pay by a credit card directly. And £10K is quite a big limit for a credit card, particularly for a card with low Life Of Balance rate.

I've never even had a credit card and don't completely understand how this all works. All i do know is that if i let my boyfriend sort his loan out for himself, we'll end up paying way too much!

Right. Stop it while it is not too late!

Can anyone explain in laymans terms how this all works?

Read again Balance Transfers, Super BTs, and Stoozing articles (see links in the blue box above)

angelfire

grumbler wrote:

I'd advice your bf to buy something cheaper if he cannot save for a car and doesn't know anything about loans.

I'm not sure if you are genuinely trying to help here or just out to patronise, but to answer a few of your comments:

He receives a set amount each month from the company he works for to buy a car (instead of having a company car). This will enable him to afford at least a ten grand car. As they don't give him this amount in advance in full, a loan is our only option.

His ability to save has got nothing to do with anything! Neither did i say he doesn't know ANYTHING about loans, my post was simply a request for help to get this loan down as cheap as possible.

To summarise, in his help pages Martin lists the best fixed rate loan, which would be fine for us, but then he describes a way of shifting the debt around so that it would wind up on the British Airways credit card at 4,9%. All i wanted was some further advice on this - is there anyone out there who has used a method like this one? How long did it take to set up etc..?

Once again, any (constructive) help would be appreciated!

Dee

EagerLearner

Hi Dee - I don't think Grumbler was trying to patronise - perhaps reading Martin's articles again may help you (he may have updated them since you last read them or added some added tidbits). Grumbler didn't say your boyfriend doesn't know anything about loans, only that debt is something you shouldn't get into if poss...

Low percentage for life credit cards sound good but a cheap loan may work out better - perhaps look for one that you could pay more into if you had spare cash? It may be that once say half is paid you could then look for say a 12 month 0% balance transfer credit card as long as you met the minimum payments and transfer that to pay part or all of the loan, if they allow lump sum part payments. In terms of gettign a cheap locan, check out https://www.moneysupermarket.com and if you find a cheap supplier, maybe get the loan through a cashback site? That's just an idea, don't know if it's possible.

I have not been on this site long so please do read up more of Martin's articles than take my wisps of stringy and sketchy knowledge...

I know what you mean about looking out for your other half - only last month 'we' agreed that I was the financial controller from now on and it works well - he just has to agree with my research & final decisions ;op

Good luck and keep us posted!

EagerLearner

Astaroth

If it is to obtain a works car and he gets an allowance for it may it not be better to lease the vehicle rather than buy it? I have a slight advantage as my employers (though a bank) can lease a vehicle to me as a company car (no thanks, BIK taxation is far too high) or as a personal vehicle (which I take). Depending on what his job is buying a new car every 3 years or so is an exceptionally expensive way of doing it and leasing often works out fairly favourable.

angelfire

Astaroth wrote:

If it is to obtain a works car and he gets an allowance for it may it not be better to lease the vehicle rather than buy it? I have a slight advantage as my employers (though a bank) can lease a vehicle to me as a company car (no thanks, BIK taxation is far too high) or as a personal vehicle (which I take). Depending on what his job is buying a new car every 3 years or so is an exceptionally expensive way of doing it and leasing often works out fairly favourable.

Yeah, we've looked into this but to be honest, although the rules do stipulate that he has to buy a car no older than 3 years old, they don't state that he has to replace it every three years, so long as you don't leave it too long. so after weighing up the options, a car owned outright by ourselves after the loan term ends is more favourable. But thank you for the suggestion!

Astaroth

If you are intending to keep the vehicle for 5+ years then buying certainly is the better option - I know my payments dont demand that I buy a new car every 3 years (or even that I use them on a car at all for that matter) but some jobs, particularly those client facing, do have an unwritten requirement for a certain image - a business consultant that charges £1500 a day for their services isnt going to look too good turning up in a ford fiesta, probably shouldnt matter but first impressions do count.

angelfire

yup, take your point and fully agree - to some extent he IS client facing and for that reason is looking for an exec saloon.

Were having problems at present though trying to obtain a decent loan rate despite an excellent credit score and he is reluctant to try and use any of Martin's methods i've asked about further up this post, as we haven't done anything like that before and could do with advice from those that have.

Hey ho i'm sure we'll sort it soon - then i can finally get rid of the rafts of autotraders hanging around the house!