Zopa Loan - Possibility?

FoxtrotUniformCharlieKilo

Hello everyone.

This will probably be quite a long one so I appreciate anyway who takes the time to read and reply.

Hopefully this is quite an easy one for you guys and to be honest, I feel my own knowledge and that of family and friends has already helped however the great thing about this site is that it is so easy to get an excellent 2nd opinion.

Basically I would like a loan. Roughly £3750, (I don't really want to pay back more than 4k in total including interest).

There are various reasons for this loan which I shall list, and there are various version which may hinder my chances of getting this loan. With your help I would like a good idea on how long I might need wait and whether Zopa would be a possibility for me.

Why I want the loan...

£800 to clear O/D
£1000 personal debt to family/friends.
£350 for outstanding balance on alloys.
£500 to consolidate a future debt of spending money for holiday this year.
£750 to pay car insurance that will be due in September (don't want another year long DD)
And the BIG one. £500 - £1000 on an engangment ring

I make that £3650.

Next bit that I guess will help you guys know whether Zopa would be interested in lending to me is my personal circumstances.

I have been very lucky to recently get a new job which has increased my basic salary by £6,000 (Yes I was shocked aswell). I am now earning £21,000 but this is liturally the first month of my new salary.

With this new oppurtunity in my career, I have cut out some bad habbits and turned over a new leaf. I want to use Credit for what I guess its there for, to extend what I earn in a year over a longer period of time so I can get "my house in order" and make my girlfriend of 6 years my wife for future (we won't be planning on wedding bells yet, not untill we are on the proprty ladder atleast).

Negetive factors:

I am only 21.

My electoral roll won't be updated untill May (I am happy to wait till May to apply for loan though).

Positive:
Never had a late payment.
I have car finance finishing in August (will free up £269 extra a month)
No searches for credit in last 2 years.

I hope I have been able to include everything, if I haven't it might be because I am in a rush to get to football (another part of my new leaf is to get fit!!!)

I shall return after football and check this thread.

Final other thing I had to say was that the reason Zopa interests me is obviously because of the better interest rates but also because I have seen that you can pay off more each month???? Is this true???

I only really intend to have the loan for 2 years (however I think zopa is minimum of 3 years). Realisticly though, with the option to pay off more each month, I could pay a loan this size off in 18 months.

Many thanks

Apples2

We were doing well until I got to the £1000 for an engagement ring.... I'm out.

ViolaLass

It is true that you can overpay as much as you want with Zopa but they will also charge you a fee (added to the loan).

However, borrowing to get spending money for your holiday doesn't sound like such a great plan. Neither does borrowing £500-1000 for an engagement ring. And why don't you want to pay for the car insurance by DD? Why borrow for it instead?

Think how much you could be saving for a house if you didn't spend it on these things (since you say you want to get on to the property 'ladder').

You're earning enough to live comfortably - don't spend it all in advance or you'll get into trouble. You should be able to save most of the money you need once your new job starts - within six months you could have bought everything AND not paid any interest.

FoxtrotUniformCharlieKilo

Apples2 - There was no need to comment then was there if you have nothing constructive to say?

ViolaLass - Thank you for your resonse. I don't know if I have got the wrong end of the stick or maybe apples2 response had made me think this, but are the majority of the responses I receive going to cast a judgement on what I want to use the money for? I suppose I didn't have to post why I wanted the money but I knew people would ask so I thought I would be upfront and honest. I guess the idea of "money saving" is cut out any enjoyment from life and any privliges we can afford?

I thought credit was to be used in position where you can more than afford to pay for something over a term however you would like to purchase/pay off in the present time? Maybe I was wrong...?

I agreed with what you say regarding holiday money and maybe I would be wiser to save for that, but theres only so much you can save in so much time and only so much time before I go. Going without any money obviously isn't an option.

I hope that doesn't sound peeved at you Viola because your post was alot more constructive than critiscm and I appreciate that. Thank you.

If the general theme of the responses are going to be trying to cast judgement on my life, then I guess I know where the big X is.

Tammer

FoxtrotUniformCharlieKilo wrote: »

I thought credit was to be used in position where you can more than afford to pay for something over a term however you would like to purchase/pay off in the present time? Maybe I was wrong...?

I agreed with what you say regarding holiday money and maybe I would be wiser to save for that, but theres only so much you can save in so much time and only so much time before I go. Going without any money obviously isn't an option.

Hi,

Please don't be upset by the responses. They're trying to save you money!

Credit is mainly used to pay for things you can't afford. If you have the money for them, you don't need credit. Credit is generally expensive and, comes with the risk of having large men taking away your stuff if you lose your job.

The "I want it now but don't have any cash" is what ended us up in the current recessionary economic climate.

If you want to save money (the purpose of this website) you could have a stab at saving some cash up.

DermotFlanigan

Can't you save the 6k you have extra salary. It will clear all that spending in 6/7 months..?

Tixy

To borrow £3750 over 2years and pay back less than 4k you are looking at an apr of under 7%. I think you are pretty unlikely to get that apr based on the amount you want to borrow and the other things you have posted.

I'd agree with others about saving up for the luxury items first, but considering the term you can pay back in you might want to consider a 0% credit card for some of the items you have mentioned (personally I'd go with clearing your existing debts using a super transfer card, but you might choose to prioritise new spending on the holiday or car insurance or ring first and go for a 0% purchase card - I doubt you'd get a limit to do all of them).

ViolaLass

FoxtrotUniformCharlieKilo wrote: »

ViolaLass - Thank you for your resonse. I don't know if I have got the wrong end of the stick or maybe apples2 response had made me think this, but are the majority of the responses I receive going to cast a judgement on what I want to use the money for? I suppose I didn't have to post why I wanted the money but I knew people would ask so I thought I would be upfront and honest. I guess the idea of "money saving" is cut out any enjoyment from life and any privliges we can afford?

I thought credit was to be used in position where you can more than afford to pay for something over a term however you would like to purchase/pay off in the present time? Maybe I was wrong...?

I agreed with what you say regarding holiday money and maybe I would be wiser to save for that, but theres only so much you can save in so much time and only so much time before I go. Going without any money obviously isn't an option.

You replied more politely than some so thank you!

Credit means different things to different people but what people on this site are generally aware of is that if you apply for credit with the attitude of 'I can pay this back over two years but I want the thing now' you can get yourself into trouble. How far do you extend that? Do you buy the thing if you can pay it back over five years? Ten years?

To me, credit is a thing that allows me to buy things I NEED but cannot pay for now, it isn't just for things I don't want to wait for.

You say you don't want to pay much interest but if you ought to be able to save the amount you want over six months in your new job and then you won't pay any interest at all. I mean that - you could have the money in the bank in six months, possibly less. Wouldn't that make you feel more comfortable?

This site isn't necessarily about doing without, it's also about finding the best way to finance things you've decided you're going to buy, whether that's getting the best deal, finding the cheapest loan or working out whether you can wait and save the money first. Saving is a good habit to get into and will stand you in good stead.

People have picked up on the things you want to pay for because they are important. Had you come on here and said "My car has been crushed in an accident and I absolutely have to have one for work, I need £500", you would probably have got a lot more sympathy than "I want to spend £1000 that I haven't got on a ring".

Would your girlfriend want you to get into debt for an engagement ring? Do you really, in your heart of hearts, think it's a wise thing to do when you could wait a few months and have the money then?

As regards the debate over the wisdom of spending £1000 on a ring - suffice it to say, mine cost a lot, lot, lot less and I love(d) it very much (I don't wear it now as I'm married - I've never felt the need to wear both). Love is not about how many zeros there are at the end of a price tag, which doesn't necessarily mean you shouldn't spend the money but does mean you should know WHY you're spending the money. (If it's because "it's traditional", you should be aware that it's a tradition invented by the companies that sell the rings)

That's my take on it, anyway.

FoxtrotUniformCharlieKilo

Tammer - Thank you for your response. Its more of a "I want it now but don't have the cash YET". Saving hasn't just got positives, the downside is the time it takes to save. Unfourtuntly I don't have time. (certaintly not 6-7 months matthewandemma) The money saving aspect of my post is asking about Zopa instead of going straight to Sainsburys or post office at higher rates, however no one has yet managed to answer the question of whether or not I would be able to get one. Instead of everyone wants to tell me how to save my money and not get what I want, sorry to be rude but if I had wanted that, I would have asked for that.

Tixy - Hello, much more constructive response. I would lower the amount I was borrowing if it were to come over 4k, there is defenitly some flexibility in what I might borrow. The priority would be the Ring (got a weekend away when I might pop the question booked and paid for) and the holiday spending money as that is coming so soon. Im not very smart when it comes to Credit cards, I have never had one so don't really now the ins and outs of how they work.

Just as another reference for anyone else, by september (If I were to get this loan we are talking about) my outstanding Debt would be 4k loan into a 21k a year salary with no Direct Debits (bar a phone contract) and everything else going to savings and daily living expenses. I also would have a car with an estimate value of 4.5k. I don't see what is so bad with this? Would mean I could make my girlfriend have the happiest day of her life so far, I could have one of the best holidays of my life and I would have cleared my O/D and alloys. Sounds like an ideal situation, still don't understand the negetive responses...

FoxtrotUniformCharlieKilo

Thanks again ViolaLass,

Hopefully my post just after yours may have covered a few of the points you made regarding time restraints.

I think you've hit the nail on the head with regards to people having a different idea for what Credit is for, I think there is nothing wrong with anyones outlook on it. I have done the "I want it now and can it afford it over time" process when I got my car roughly 18 months ago, since then I have never been late with that agreement and wouldn't say that having £1400 outstanding debt (which a big chunk is due to a car crash that was my fault) is being irresponsible with credit.

And with the ring, the cost isn't of any relevance to her. It just happens to be the types she likes her in that price bracket and therefore to make it perfect for her, thats what I want her to have.

Probably be my last post for the night, will check back 2moro. Thanks again.

Tixy

Might be worth having a look here Cheap Credit Card Loans: Manipulate plastic to get a 6.6% loan

As you haven't had a card before this might limit what card you find you are able to get or what limit you might get. But it might be something to consider.