Bank loan?

JackRS

I can quickly and easily get a loan from my bank (First Direct) e.g. £2000 over 12 months, £180.41 per month (APR 15.9%), total repayable £2,165. I know there are some slightly better rates available but a bit more hassle and time delay in setting one up. I thought another option is to go for a further mortgage with the minimum being £5000 so I could return a large portion in overpayments etc to get a much better rate, however admin fees etc make it less attractive.

Just wondered if I was missing out on something that was simple and would cost a lot less than £165?

Joeler

Depends what the money is for. 0% credit card could be better.
Or overdraft or mixture of the two.
Overdrafts can be instantly recalled though, although this is unlikely whilst haveing wages paid in and reducing it monthly.

That's not a bad rate for that loan amount at the moment...

Rafter

Might also be worth taking a look at Zopa and the post office loan.

Both have sub 10% rates and would be better for a small amount.

As Joeler says, paying no interest is the best of all - if you can get a 0% purchases credit card and buy what you are planning using that?

Good luck

R.

JackRS

Item is already purchased on another credit card (Tesco) which I always pay off each month, so the transfer to another card incurs costs and I’ve only got to the end of the month, not sure I can sort a new card out in time? I already have a HSBC and Halifax card both empty (they were old 0% deals I’ve used in the past). I’m not sure there are so many credit card options left?

I’ll look into the Post office option, thanks

JackRS

I decided to go for a credit transfer and applied to Virgin for 16months at 0% for a transfer fee of 2.98%, the application seemed to go through OK as it said ‘your in’ card on the way? Just need to set up direct debit to ensure minimum payment and then clear it when my mortgage finishes next year!

Thanks for helping me think this one through!

jamesd

JackRS, yes, the card will be on the way. Nice cheap borrowing deal and I have one from them myself.

JackRS wrote: »

£2000 over 12 months, £180.41 per month (APR 15.9%), total repayable £2,165. ... Just wondered if I was missing out on something that was simple and would cost a lot less than £165?

Rafter wrote: »

Might also be worth taking a look at Zopa and the post office loan. Both have sub 10% rates and would be better for a small amount.

Zopa has an application fee of £118.50. For £2000 borrowed over one year that's equivalent to around 11%* interest rate even if lenders are charging 0% interest. Add say 6% from lenders and that's around 17%, an amount that even paying interest on many credit cards will beat.

The combination of amount and term pretty much rules out Zopa as a good choice for anyone who'd meet Zopa's lending criteria.

*£118.50/ £2000 * 100 = 5.925% but the average amount owed is about half of the £2,000 so the effective rate is about twice that. Also note that the three year term quotes from Zopa will under-quote the effect of the fee for one year because it's spread it over all three years instead of just one.

Declaration of interest: I both have offers at Zopa and loans taken out via Zopa. It's currently unlikely that I would lend to an applicant there.

[Deleted User]

JackRS wrote: »

Item is already purchased on another credit card (Tesco) which I always pay off each month, so the transfer to another card incurs costs and I’ve only got to the end of the month, not sure I can sort a new card out in time? I already have a HSBC and Halifax card both empty (they were old 0% deals I’ve used in the past). I’m not sure there are so many credit card options left?

I’ll look into the Post office option, thanks

talk to the halifax see what rates they can offer for a transfer,i recently got 6.9% for the life of the trans,last year i got as low as 2.9% for a trans,ok the 3% is a pain but could be worse if you get a good rate,plus halifax repayment is only 1% per month if youre ever skint