0% Credit card or loan? Help!

gracewiltshire

Hi
I wonder if anyone can help me or give me some advice.. I'm not very money-savvy and have never had a loan or a credit card as I've never needed one.

I need to borrow £2000 to pay for a car by next week. What are the best options?
I've looked into loans and found that my chances of getting one seem to be quite low and the ones I am eligible for the APR is very high even if I spread the cost over 3 - 4 years.. One loan wanted £75 per month for 3 years and I'd be paying a whopping £800+ interest on my £2000 loan!

My friend mentioned that there are 0% credit cards now for up to 16 months but when I looked into it, it was made very clear not to use them to pay off things as they are for short term spending.

I am so confused as to what is the best option and no matter how much good advice I read on here none of it seems to be making much sense to me.

Is it worth speaking to someone at my bank for advice?

I'm not sure if its worth pointing out that I am a 21 year old home owner with full time employment and paid (moderately) well.


Thankyou in advance

Grace

molerat

You are unlikely to get a [STRIKE]0%[/STRIKE] credit card [STRIKE]with a £2k limit[/STRIKE] by next week.
Car dealers will make a charge of 2-3% for buying on a credit card.
A 0% card is a good option as it is a loan, interest free, for 16 months, the problem comes if you do not pay it off at the end of that period.

YorkshireBoy

gracewiltshire wrote: »

I've looked into loans

By "looked into", do you mean you've made applications and/or been credit searched already?

A credit card with a £2K credit limit would be pushing it for a first-timer, especially one aged 21 with a mortgage!

waqasahmed

YorkshireBoy wrote: »

By "looked into", do you mean you've made applications and/or been credit searched already?

A credit card with a £2K credit limit would be pushing it for a first-timer, especially one aged 21 with a mortgage!

I hate it when people say this. IF the OP managed their money well, they can get good limits. I was 19 when I first got my cc. I got a limit of 3K (not 0%), no benefits to it, no mortgage to my name and at the time you had to be earning at least 15K

Now I have a Nationwide select card, with a 2K limit (I have two other cards with a £500 and a £250 limit), and that has a 0% rate for 20 months, as well as giving cashback

YorkshireBoy

waqasahmed wrote: »

I hate it when people say this.

Assume you're referring to the second paragraph, even though you quoted my full post?

IF the OP managed their money well, they can get good limits.

The OP only has a mortgage (and for not very long I'd guess?)...no other history of managing credit, at least not with a credit card or a loan. So they can't prove they can manage this kind of credit line.

Indeed, the lenders they've approached so far seem to think so too, being as the OP says the chances are "low" and the one loan they've been accepted for (presumably?) wants to charge 20%+ APR.

I was 19 when I first got my cc. I got a limit of 3K (not 0%), no benefits to it, no mortgage to my name

I'd say that was a major distinction between you and the OP, so you're not comparing like with like.

You had no mortgage payment each month, no household bills, no maintenance costs, etc.

The OP is looking at borrowing £2,000. They're looking at 3 years, presumably to keep the payments low. That says, to me (and probably the lenders), that things are tight. Otherwise why need so long for such a (relatively) low amount.

gracewiltshire

YorkshireBoy wrote: »

By "looked into", do you mean you've made applications and/or been credit searched already?

A credit card with a £2K credit limit would be pushing it for a first-timer, especially one aged 21 with a mortgage!

When I say looked into I literally just went on to a comparison site and entered the basics I haven't made any applications and things. Then at the end they said the chances of me securing that loan is low anyway. I have made an application for a credit card with M&S bit they won't give me a very high credit limit. Still very very confused but thankyou for your advice!

kaych

I am just surprised that someone in a full time employment who is paid 'moderately' well need to borrow £2000 for a car... I don't know how long you have been in this job, but if you are paid quite well, then I think you are better off just saving that amount.

pqrdef

If you get the M&S card, you're part-way there at least. You might look at getting an overdraft for the rest, if your bank charges interest rather than daily fees. It can be a relatively cheap way to borrow, because your salary offsets the debt.

Nationwide are dishing out free overdrafts of up to £2500 with their FlexDirect current account.

Spoonthumb

Just applied for the tescos credit card (16 months 0%) and got it with 4k limit. Applied for the Halifax 10minutes before that and they only gave me 9(months 0%) with 1k limit so don't give up on one application !
Try tesco !

waqasahmed

YorkshireBoy wrote: »

Assume you're referring to the second paragraph, even though you quoted my full post?The OP only has a mortgage (and for not very long I'd guess?)...no other history of managing credit, at least not with a credit card or a loan. So they can't prove they can manage this kind of credit line.

Indeed, the lenders they've approached so far seem to think so too, being as the OP says the chances are "low" and the one loan they've been accepted for (presumably?) wants to charge 20%+ APR.I'd say that was a major distinction between you and the OP, so you're not comparing like with like.

You had no mortgage payment each month, no household bills, no maintenance costs, etc.

The OP is looking at borrowing £2,000. They're looking at 3 years, presumably to keep the payments low. That says, to me (and probably the lenders), that things are tight. Otherwise why need so long for such a (relatively) low amount.

Sorry, yes I was referring to your second paragraph. In my situation, I was meant to be earning 15K. I "earn" considerably less

I was also allowed to open a Nationwide Flex account with less annual income than required

Tbf, with the two providers who provided me with high limits, they were banks who I've got history with, so maybe the OP should approach their bank?

kaych wrote: »

I am just surprised that someone in a full time employment who is paid 'moderately' well need to borrow £2000 for a car... I don't know how long you have been in this job, but if you are paid quite well, then I think you are better off just saving that amount.

This. I'm living on student loans and I have a pretty decent-ish car. All bought, paid for, in cash. No interest

[Deleted User]

Lets remember times have changed, and what happened a couple of years back is not happening so much now!

I didn't have any luck at all with credit cards until I was 21, but I find that my own bank always give me the best options, i.e. high limits and low rates.

So a good start is always your own bank as you stand a much greater chance of success.

Whilst everyone has their opinion, I think it's really down to who you apply to, when you apply and the number of applications you have made before you get to the one that was meant to accept your first time. If that makes any sense at all!

I don't think you should be looking for a 2K loan. They don't offer the best rates for such a small amount - I know Halifax has to be 5K + to get the best rates.

Credit card seems the correct option - just now the problem of getting the right one, with the right rate and right limit.

Overdraft is another nice option, however I can't manage mine, so it wouldn't work well for me :-(

Good Luck and hope you enjoy the new car!