Looking for a largish loan over a longish period that I will sneakily pay off early..

Temrael

Hi there,

We moved into a new (to us) house last Autumn and want to smarten it up.

Nothing too drastic (nothing structural) but the place is a bit shabby throughout and has an antiquated heating system.

So we have been merrily saving about £1k a month to pay for these works (which will cost about £20 - 25k in total I'd guess) as we have a fairly healthy disposable income right now.

We have about £10k and so it will only be about a year or so before we've saved the remainder. The sensible thing to do would be to wait until we've saved the lot but we are a little impatient to get the new place right and in the bath yesterday I had an epiphany.

Would it be possible to take out a long term loan (to keep the repayments low) one without nasty early repayment terms (no penalties, no weird interest calculation etc.)?

Does anyone know of any products out there that would be suited to this? We'd be looking at £10 - £15k over like 10 years or something but in reality we'd probably pay it off in 1 year. I like the idea of doing it over a long period so that the repayments are low in the short term so that we're not at risk if one of us unexpectedly loses our job for example.

I'm approaching our mortgage company (Portman) to see if they'd increase our borrowing but as we are in a 5 year fixed period I suspect any additional borrowing would be on a similar term.

Thanks in advance for any advice!

mrcow

Temrael wrote:

Does anyone know of any products out there that would be suited to this? We'd be looking at £10 - £15k over like 10 years or something but in reality we'd probably pay it off in 1 year. I like the idea of doing it over a long period so that the repayments are low in the short term so that we're not at risk if one of us unexpectedly loses our job for example.

Any of the major loan companies who offer no early repayment penalties are worth a shot. For loans over £10k, you should be getting fairly good rates (dependant on credit rating).

If you want to compare rates, try moneysupermarket.com and make sure you click the option "no early repayment penalties" lol or whatever it says.

A starter is Egg @ 7.9% (I paid off a loan early with them and it went smooth as you like).

Just beware of any PPI that may be sneaked in, as it will be costly (especially if you're looking to settle early).

If you're looking to pay it off in one year, I wouldn't touch the mortgage personally.

Or....you can always do what we did when we bought our new kitchen, and borrow it all on a 0% credit card (which we then paid off in 12 months).

Take care.

regularsaver1

if you increase your mortgage - the additional funds should be able to go onto a product without penalties if portman do that - worth to ask

don't worry about trying to hide the fact - just be upfront and state what you'd like to do

Temrael

Thanks a lot guys, will do some more research.

Had a look at Zopa but even though I got an "A" rating they were offering like 8.5%.

mrcow

Temrael wrote:

Thanks a lot guys, will do some more research.

Had a look at Zopa but even though I got an "A" rating they were offering like 8.5%.

You can do a lot better than that I'm sure.

planetdannii

I agree with mrcow...you already have £10,000 so thats a good start
Use a 0% Credit card to buy the items (You could even find yourself a cash back offer on purchases too) if you havn't paid it all off by the end of the year you could always do a balance transfer with 2% fee capped at £50.
That's def the way I would go,,,if problems occur like you get made redundant then you can consider the loan option then.
Worked for me for years

btbloke

Hi, I'm in a very similar situation. I've had a offer accepted on a house which is way below it's value as it is dated and needs new kitchen bathroom etc. I'm a first time buyer and can't get any extra funds from the mortgage company to do the place up. I was also thinking about 10K over ten years to keep the repayments low and then as soon as possible add the debt to the mortgage. I did consider an interest free card but if I spent 10K on that surely i'd still have to make minimum payments (5% would be £500/month... I think). That's impossible for me so a loan is the only way. Will most loan companies offer 10 year deals? I know that once i've improved the property there should be at least 30K profit in it so if I'm desperate I could sell.
Hope someone can help