Loan advise – Get Now or Later?

smb-uk

Hello,
I’m looking to borrow 13k over 5 years and I see the best available rate is currently 5.6%, which I should get as I have excellent credit rating. Anyway, is now the best time to take the loan even though I’ll not need the money until Spring next year? I’m basing this on the fact the base rate has just risen and that a further increase is expected.

If I get the money now and put it in say a ING account (at 4.5% Gross or 3.53% Net) then would I be earning more interest on the loan then its actually costing (over the 5 year period).

I guess I’m trying to pre-empt interest rate rises. But I would appreciate your opinions/thoughts on this.

Cheers
smb

Luke

smb-uk wrote:

Hello,
I’m looking to borrow 13k over 5 years and I see the best available rate is currently 5.6%

If I get the money now and put it in say a ING account (at 4.5% Gross or 3.53% Net) then would I be earning more interest on the loan then its actually costing

I pride myself on my mathematical ability but this one really isn't that hard.
The cost of the loan 5.6% is higher than the interest on the savings 4.5%.

As for taking the loan out early, don't bother. When the time comes around you may not need or want it for the reason intended.