Good Idea/Bad Idea

PolaBear

Hi people, im thinking of taking out a loan of £3000 over 60 months which would be an overall payback of £4300. Have never taken out loan before and credit is rated as excellent. Payments would be £73 a month which i can cover easily, and have means to cover anyway (New car paid for, some savings dont want to touch). Doing this will put me completly in the black and give me freedom to do things i want to do without any oweing, what i buy i have money for and allow me to not have to owe anything else, not in any problems now but just want freedom. Make sense? Thanks for your help. James

somethingcorporate

If you have savings why would you want to pay to borrow money?

Sounds bad to me.

opinions4u

Use your savings and then make sure you replace them with what your monthly payment would have been.

(Contingency fund: make sure you have at least 3 months net pay in savings left untocuhed - if you don't, save up a little longer until you do).

PolaBear

By savings I mean assets that mean that I would not have an issue paying the loan as I would also not have any other payments outgoing, and also raise my income. As i said doing this would put me into the black, and i am wanting to do exactly what poster said by building up savings through weeks worth of earnings. Am now in situation where i dont want to owe anything, and was thinking by doing this i can clear everything and more or less all of what i earn is then mine. Thanks for all of your advice, have never had loan before and just working things through.

DayDreamSaver

Hi

I'm not sure I fully understand your situation. Are you currently in debt and want to borrow more money to pay this off?

If so, I suggest you go to the debt-free-wanna-be board, and lots of people can advise you how to pay off your debts as quickly as possible.

I don;t think borrowing more money is the best plan - but it depends what kind of debts you currently have - overdraft? Credit cards?

Good luck
DDS

somethingcorporate

PolaBear wrote: »

By savings I mean assets that mean that I would not have an issue paying the loan as I would also not have any other payments outgoing, and also raise my income. As i said doing this would put me into the black, and i am wanting to do exactly what poster said by building up savings through weeks worth of earnings. Am now in situation where i dont want to owe anything, and was thinking by doing this i can clear everything and more or less all of what i earn is then mine. Thanks for all of your advice, have never had loan before and just working things through.

Thinking that by borrowing more you will not have any debts?

If you want to be in the black then use your assets to clear your debts, taking out another loan is likely to not solve your "having debt" problem.

PolaBear

somethingcorporate wrote: »

Thinking that by borrowing more you will not have any debts?

If you want to be in the black then use your assets to clear your debts, taking out another loan is likely to not solve your "having debt" problem.

Dont currently have a loan, by taking out a loan of £3000 I will clear what I do owe now (end of car finance, overdraft) and have a much larger % of my earnings freed up, as well as a fully paid for car (6 months payment left), a overdraft I can then close and savings I can then begin to add to. Not really experienced in debt and borrowing and do not want to go down that road, plan would be to clear what I owe, and then pay off loan, probably before 5 year period (bank will allow overpayments). Also by having more of my income freed up, I can then move on to other things I want to do.

Really appriciate everyones help

CLAPTON

just give the facts and get sensible advice or don't and don't

PolaBear

Ok

Current situation

Have car on finance with 1300 remaining
Have overdraft of 700
Have credit card with 700 owing

Idea was to take out loan of £3000, pay off all that I owe on the above, and then due to the fact that I will then have a higher % of money available to me and not owe anything at all other than the loan, pay off the loan over 5 years, less as it allows overpayments.

CLAPTON

income?
savings ?.. and explain
why you don't want to use them

debts... amount, apr, monthly payment

PolaBear

Ok

Money spent at moment 400
Loan offer £3000 60 months times £73
So difference of 300+ per month

Dont want to use any savings, want to add to them, always said i would not use them and dont want to go back on that

Goals
Have no credit card
Have no overdraft
Savings

Debts are what I mentioned before, nothing else