Can't decide! Pay off sofa monthly or all in one go?!

kankan_2

Please help me decide what to do!

We're due to start paying off our sofa from DFS in Jan.

We can either:
1) pay off in full (£1000) or
2) pay off monthly (£40/m) - no interest is charged for this.

My husband reckons we should just pay it all off so that it's done and dusted.
I'm inclined to disagree especially as it's interest free so it's not costing us extra to pay monthly.

My dilema arises because before we start upping our mortgage repayments, we are trying to get £5k of savings put away in case of emergencies (redundancy, etc etc) and if we paid the sofa off completely, this would set us back (by about 4 months).

Monthly payments would mean £40 less per month into the savings or mortgage though.

I can't work out what to do for the best and wondered if anybody 'money saving savvy' would be able to help!

Thanks in advance...

Tim_L

Depends on the deal. They often make it very difficult indeed to make a final payment, or it rolls somehow into a high interest rate deal. Check T&C carefully and make sure there are no dates you can miss.

For a grand you're not going to be making much in interest, so it comes down to hassle factor for dealing with the credit really. Probably I'd pay it off myself, unless it was a solid direct debit based deal that needed no attention.

PS: I took a very extreme MSE approach to our own 3 piece suite purchase. We chose the sofa, etc, haggled on the basis we would be paying by debit card to get a 10% discount, paid the deposit with a debit card in the shop, paid the balance with a 2% cashback credit card, and then transferred the balance to a rolling 0% deal.

save-a-lot

Hi

I took a 2 year interest free deal when we bought a bed, and at the time we figured it was a better decision to earn the interest on our saved money and take advantage of the interest free offer. Like you, we wanted to keep our savings buffer well stocked and it has definately helped. Having a savings buffer does give you a feeling of greater ease and I think that counts for alot.

dwsjarcmcd

We have just bought a suite from DFS. We wanted to pay it off but they wouldn't discount the price, so we chose no payment for six months, then 42 payments of just over £40 a month.
It is interest free, no penalties for early repayment and paid by DD. I couldn't see any advantage to paying it in a lump sum. HTH

Mattie_Boy

dwsjarcmcd wrote:

We have just bought a suite from DFS. We wanted to pay it off but they wouldn't discount the price, so we chose no payment for six months, then 42 payments of just over £40 a month.
It is interest free, no penalties for early repayment and paid by DD. I couldn't see any advantage to paying it in a lump sum. HTH

We also brought a new suite reacently - form scs and got offered there 3 year interest free deal, but they wouldn't budge on the price.

So paid for it on a cc - getting points + is int free on purchaces for 4 months yet.
They took of just over 10% of the cost (a lot when your spending around 4k... mrs has expensive tastes :rolleyes: )

Now just got 4 months to get a 0% card for b/transfers.

Just a thought, but this might be another way of going about it.

David_B_2

Personally I hate having debt and I can't see the point of paying for a year or more on something that you'll be sick of paying for before it's finished (2 months max). I would have either put the money way and save it until I could afford the sofa and then I have something to look forward or I would have paid in full at the time of sale and got a discount instead.

If no discount then no sale and go else where as there is plenty of choice.

The reason the credit is interest free is for a very good reason, because the original price is higher than it could be. They don't give it a way and you'll just pay the interest your saving on the total price anyway.

I've worked in the business.

So to answer your question, up to you really. Do you want to pay for 12 months on something you've already got? I certainly would'nt do it if it effects your emerency fund as your not going to save any interest nor make a great deal via banking the monthly payments.

PS: As mentioned about, make sure you check your T&C's and that there is no extra charges for paying off earlier etc.

pollyanna24

We've got a sofa from DFS and our payments are due to start in March 2007. I have the money already in a savings account ready to pay it off. I did think about the interest free payment thingie, but then looked at the contract that my bf signed. The cheeky so and so who sold us the sofa has put payment protection on the agreement. We can still pay in full in March, but if we didn't, we would be paying over 6 months and each month, they would be charging £30 for this protection, even though I told the man I had the money in an account, but thought I would take them up on their buy now, pay later policy. He probably hoped I wouldn't check!! :mad:

A11yson

This also happened to me and I even told him in the shop that I didn't want it - he still insisted in adding on PPI. When my BNPL came to an end at the beginning of Dec I wrote the finance co a stinky letter telling them he had mis-sold the PPI to me and they have now removed it, and my payments have been adjusted. Am paying 6 months interest free - will hang onto my pennies for as long as possible.......:rotfl:

benood

How about setting up a high interest account with your bank and putting £1,000 into it and then direct debit £40 a month from the savings account into your current account to pay DFS. That way you've set aside the £1,000, like paying it off in one but still get the benefit of interest earned on the £1,000. Have your cake and eat it.

kankan_2

Thanks for all your messages. I think we'll pay it off in full early. I've checked and no penalty charges for doing so.

Thanks

jamesd

Just so you know, paying it off in full, instead of paying 1000 off the mortgage then reducing the mortgage overpayment by 40 a month, costs about 50 more in mortgage interest.

Cheap enough if you just don't want to be making the payments for the sofa for the next two years.

The calculation is very approximate, just good enough for general discussion.