Making profit from a loan???

rakesh_2

Hi ppl

I'm thinking of taking out a Northern Rock Loan and put the money in a saving account - . If i was to put £15,000 in the ICICI bank i would make £618 net interest. In terms of paying back the loan the interest is £455 - which makes a profit of £163. is this wishful thinking.........

dang

Sounds like it,what rate is the loan at?

grumbler

:rolleyes: :rotfl:

rakesh wrote:

...I'm thinking of taking out a Northern Rock Loan and put the money in a saving account - . If i was to put £15,000 in the ICICI bank i would make £618 net interest.

Only if you keep the whole amount £15000 in the account for the whole year. However, you must make repayments every month. As a result, average balance during a year would be about £7500 and the interest - about £319.

In terms of paying back the loan the interest is £455 - which makes a profit of £163. is this wishful thinking.........

- which makes a loss of £136.
If you use your income to make repayments, result would be the same as you lose interest that you could have got by putting this money into the savings account.

Don't try inventing perpetuum mobile. You cannot make money by borrowing at 5.7% and getting 4.12% (net) on your savings ...

dang wrote:

Sounds like it,what rate is the loan at?

5.7% See http://www.northernrock.co.uk/loans/quote/quickQuoteIM.asp?ref=655-0009 for 12 months ...

Al_Mac wrote:

Is that based on the ICICI net rate 3.??% Are you a 40% tax payer?

£15000*5.15%*0.8=£618

rakesh_2

its @ 5.7%. I was also thinking that if i pay the monthly payment by my MBNA Points Credit Card or even the Egg Money Card [1% cashback] u can reduce the overall interest payments. E.g MBNA will give u £20 for every £4000 spent

rakesh_2

its @ 5.7%. I was also thinking that if i pay the monthly payment by my MBNA Points Credit Card or even the Egg Money Card [1% cashback] u can reduce the overall interest payments. E.g MBNA will give u £20 for every £4000 spent

rakesh_2

I was thinking of paying the monthly loan amount by an interest free credit card.....n hopefully get points/cashback through MBNA Points or the Egg Money Card

whambamboo

rakesh wrote:

its @ 5.7%. I was also thinking that if i pay the monthly payment by my MBNA Points Credit Card or even the Egg Money Card [1% cashback] u can reduce the overall interest payments. E.g MBNA will give u £20 for every £4000 spent

surely that would be classed as a cash advance, costing you 2%+

rakesh_2

u can always do a SBT from the MBNA Credit card in2 ur current account n pay off the loan that way -

rakesh_2

or even better - transfer money from an interest free MBNA Credit card to the EGG Money card. From the Egg Money card pay off the loan on a monthly basis and with some luck u might get 1% cashback each time????

grumbler

rakesh wrote:

I was thinking of paying the monthly loan amount by an interest free credit card.....n hopefully get points/cashback through MBNA Points or the Egg Money Card

If you can get MBNA card with £15K limit :rolleyes: , 0% for 12 months :rolleyes: and you can transfer this balance to a current account without fee :rolleyes: - just put £15K into ICICI account and you will make £613 profit without any loan: http://www.whatsthecost.com/stoozing.aspx

You don't have any chance of getting cashback for using a CC to repay a loan.

rakesh_2

i was thinking of the same thing grumbler but i have a MBNA Credit Limit of only £5000 boo hoo.....