Very short term loan

BlueJohn

I need a short term 'bridging' loan for £16,000 for less than 30 days to purchase a car. I am receiving a voluntary redundancy package in two weeks time so should be able to pay it back then. I do not want to wait for two weeks as I would risk losing the car I want.

The banks and other short term lenders do not appear to offer anything suitable.

I could take out a long term loan from the bank over several years, purchase the car, then cancel the credit arrangement within 14 days. Under the consumer credit act this SEEMS to be possible and furthermore it APPEARS to allow me a further 30 days to pay back the credit amount with zero interest, no early redemption charge, no fee, and no penalty.

Is this too good to be true? Is there a catch or anything I should be aware of before going ahead?

Idiophreak

You could look at something like zopa - iirc there's no penalty for clearing the loan quickly.

Have you tried just asking them if they'll accept payment in 2 weeks though? Seems the easiest thing...

gb12345

BlueJohn wrote: »

I could take out a long term loan from the bank over several years, purchase the car, then cancel the credit arrangement within 14 days. Under the consumer credit act this SEEMS to be possible and furthermore it APPEARS to allow me a further 30 days to pay back the credit amount with zero interest, no early redemption charge, no fee, and no penalty.

Not quite right. You have 14 days to cancel and then a further 30 days to pay back from the date of cancellation, BUT you will be charged interest at a daily rate until you pay back.

Also, have you considered that a lender might not lend you £16,000.

DCFC79

Or failing previous advice posted you just get another car.

Have you asked the seller if they would keep the car till said date so you can buy it ?

moohound

would they not hold it if you paid a deposit?

jamesd

Idiophreak wrote: »

You could look at something like zopa - iirc there's no penalty for clearing the loan quickly.

Zopa is unsuitable for this because:

1. The maximum loan size is £15,000.

2. There is an initial charge that can exceed £1,000 that is not refunded if the loan is repaid early. Taking the money for a month could end up incurring £1,100 of costs. The initial charge depends on the credit rating of the borrower and the amount borrowed.

Best to eliminate almost all thought you had about Zopa being useful for short term borrowing because repayment can be done easily. The initial charge increases make it even less suitable than it already was. Zopa's old initial charges were still likely to make Zopa a poor choice even before the recent increases.

Taking a personal loan and cancelling would be an option but few lenders are likely to be interested with a large income drop presumably about to happen.

27col

There is one thing that you can be absolutely sure of, and that is, that there are many similar cars to the one that you think that you "must have". If they will not hold it on payment of a deposit then go elsewhere.

mrmajika

I know that LTSB certainly allowed you to change your mind about the loan and repay it in full within 30 days, without any real penalty. I'd imagine other providers may do the same.

The other alternative would be a temporary overdraft extension. I have done this in the past for £12k with my bank for a couple of weeks.

Then there's the credit card purchase option, if you've an existing card with a big enough limit and if the seller accepts this. Of course they may look to charge a fee, but I'm sure you could negotiate this off.

malcolmffc

Offer the seller a deposit in return for holding the car for 2 weeks.

OneLife_OneShot

Wait 2 weeks.

brendon

I'd also say wait 2 weeks. You'll find your car somewhere else.