loan or c card - can anyone advise?

smoggybird

Helllo
We would like to borrow £5k over 3 years or so, for some home renovations and do not know if a bank loan or a credit card would be the best option. We've never been in debt so don't know our rating. We also do not know how much our/any bank/c card company would lend us.
Can anyone offer advice on the best way forward.

cheers
Smoggybird

paul2468

I got a loan from Zopa...peer to peer £4,600 cost me £139.00 per month for 3 years, i got a better rate than my bank.

CLAPTON

standard font would be easier to read


what do your credit files say?

you say you have never been in debt; does that mean you have no credit cards, never had a loan and never had a mortgage?

what is your income

are you on the electoral roll

rachelonna

One of my favourite credit card is virgin. I think they are very good, give very reasonable credit limits.

You can transfer the money to your account. This page has a guide as to what the APR would be for the amount you want to borrow

Using the details you provided, £5k for three years, assuming that you get the typical APR for money transfers (money to your bank account), it would be equivalent to 7% APR, but it will be less if you repay before that

www dot moneysavingexpert dot com/loans/plastic-loans#mbna

jamesd

For £5,000 over three years with your best option would be Virgin or another credit card that offers balance transfers to a bank account. You'd pay Virgin a 4% fee for 20 months at 0% ongoing interest rate depending on offer. If that one and a half years isn't sufficient to repay you'd apply for a 0% for spending card and start spending on that and using the spent money to make repayments on the Virgin card to clear that before you start to pay interest.

If you have time and spend enough the cheaper option is a 0% for purchases card. Spend on that and save the money you spend. Once you've saved enough do whatever you want with the money. This saves you the balance transfer fee. If you're buying hardware for the home improvements that'll work well with this because you can just buy that with the 0% for purchases card as well and cut the time it takes to accumulate enough money in savings.

You'd only go with a loan if you for some reason dislike or can't get cards or if you're borrowing more than you can get on the card limits.

smoggybird

thanks for all the very helpful information. Will discuss with Hubby and then decide. I thought, until I read your reply, that a loan would be our only option as I didn't think we'd be given such a large amount on initially taking out the card.

cheers
smoggybird :beer: