Best loan over a long period...

Badger666

I'm looking at loans of 5.5-6K. The length of repayment really isn't a problem, but I'd like to keep the repayments fairly low.... What are the options?

mrcow

Your options will depend on your credit rating. If it's good then any of the main lenders will compete for your business.

Beware though.

You need to work out what this is going to cost you. It is naive to not bother about repayment terms/periods. Taking a loan over a long period of time will cost you a lot of money.

An example is taking a £6000 loan over five years at 8% apr, you'll end up paying £1300 in interest alone, paying the same loan over 10 years will cost you £2730 in interest. That's an extra £1400 you'd be paying just to "keep the repayments down". It's a false economy and the only loser at the end of the day is you!

Can you afford this loan? Is it for something essential (or just something that you want to have?)? Seriously? If you need to keep the repayments to a minimum, I would question your ability to pay and would advise you to have a rethink before you sign up to expensive finance that you can ill afford.

All IMHO of course

Take care.

Badger666

Basically, the loan would be used to fund a deposit for a house, so repayments would be on top of the mortgage repayments.

Therefore we're willing to take the hit of paying the additional interest on a longer term loan to make sure that we can easily cover the monthly repayments...

mrcow

lol I've just read your other thread and get what the loan is for now.

The same advice stands as above, you need to look at what this is all going to cost you. Do you have a house lined up? I'm only asking as it would be so much better if you could take a few months out before you get youtr mortgage etc and try and save up a larger deposit.

My brother was also advised to get his deposit loan after his mortgage agreement (he never got that far, so I don't honestly know if it would have worked). Have you looked into 100% mortgage deals in the first instance, you will need to do a total comparision to see what's the better deal for you.

It may be that your current mortgage offer is that good that a second loan is the best way to go.....again just make sure you know you've got the best deal before you sign (And when/if they ask you what the loan is for, don't say a mortgage deposit lol)

In terms of finding the loan, try some of the comparison sites for starters, eg. ft.com moneysupermarket.com.

Take care

Badger666

Sound advice. I'm currently researching the best loan offers I can find.

Our problem is that house prices have been rising way faster than our savings, so although we can cover mortgage repayments, by the time we've saved the deposit, it looks as if we'll be priced out of the market....

Until now, the advice to take a loan seemed fairly sound, but obviously I'm having a few thoughts about the fact we don't have a deposit and will be juggling things to meet all the solicitors costs etc....the good thing is once all the costs have been paid and we're in the house, we should be fine, it's just getting to that point without bankrupting ourselves....

btbloke

I'm in a similar situation. I'm hoping to buy a property within the next 6 weeks and can afford the mortgage payments but need about 10k for "home improvements". I'm hoping to get low monthly payments and then add the loan to the mortgage in 12-18 months. Does this seem viable?
ps does this mean re-mortgaging?

BTBLOKE