15k in savings - need to borrow 11k

TheEnglishman_2

I've 15 grand in savings but need to borrow 11 grand.

The man selling me a new motorbike is desperately trying to sell me either a baloon deal or a straight up HP loan.

But Martin here says to use savings to pay as then save the amount I'd be paying in HP to 'fund' the next one

I don't have the 'technical' details to be able to justify either option.

If I have savings that make 7% and an HP agreement at 7% I break even, don't I? But 7% of 15 grand is a lot more money then the compounded savings I'd make if I only started from 4 grand and then saved every month.

Or would it?

A 'Yellow Brick Road' would be appreciated....

TIA


P.S. - I failed 'O' level statistics by a handsome margin...

nomoneytoday

Only do it if the APR is significantly lower than the interest rate you are earning. 7% flat is about 14% APR.

TheEnglishman_2

Savings are in an ISA, so tax free, I think.

Cheapest loan I can find is 7%. (zopa)

I think it's a good bet the ISA will make about the same.

TheEnglishman_2

3 years.

The ISA is a stock/shares one - invested in 3 funds. One year it made nearly 30%, last just under 10%. The 'mid ground' prediction from the IFA is 7%, so that's what I'm guessing with.