borrow now or May 1st

daved_5

I need to borrow £25000 to finance the difference between the house I'm selling and the one l'm buying. Dont have a mortgage, dont want one. Credit rating is ok, and l might go back to Tesco Finance as l have borrowed from them in the past which wasn't too painfull. Question is should l wait until May 1st until l apply

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or will the loan companies put up their interest rates to compensate for any loss of revenue this rule change might bring them. Time is a bit tight but l might be able to hang on until May 1st if it was worth it. Thanks in anticipation of the use of your grey matter. Daved

Rafter

Daved,

Most loan companies have acted ahead of the legislation changes and use the new rules of 1-2 months of penalty interest for early settlement of the loan.

You may have a bit of difficultly getting the whole £25,000 from one provider but not impossible.

You may be able to reduce your borrowing costs further by using a Texaco card with a 'life of balance transfer' for part of your purchase at 3.9%

Otherwise the best loan rates are 5.7%+ from Northern Rock or Barclaycard.

If you want a flexible loan where you can make overpayments without penalty you might try cahoot (part of Abbey)

I don't think there are any 'offset' loans which allow you to offset your loan interest against any savings or balance on your current account. Normally you need a mortgage in there too to get the best rates. Might be worth checking out if.com and woolwich open plan to see if they do something that suits your requirements.

Good luck.

R.

daved_5

Thanks for those pointers R I am now heading in the right direction, Northern Rock immediately so the money will be in my account when l need it.

fushiafluff

Northern rock & b'card wouldnt give me the low rates (new car) but direct line came up with 8.9% but LLoyds was the best with 7.9%. This was on £20000, I think you might have a problem on 25. Happy hunting.

nh

daved, why don't you want a mortgage?

jellyhead

how long are you going to spread the loan over? barclays are offering me 23 thousand at 6.9% (not bad considering i only earn 2 grand a year - daft isn't it!), the longest repayment period on that is ten years. it's an automatic pre-approved offer, does your bank offer loans like that if you have internet banking?

a mortgage might be better though, if repayment will take longer than ten years.

daved_5

Dont want a mortgage because of the set up fees and cost of having the surveyor out. I Know the house, its ok. I want the deeds, the house is mine, not the mortgage providers. Tried Northern Rock, got accepted in principle but they wanted me to post them my last 3 months wage slips. Hang on while l just go down the tip. They didn't mention whether or not l wanted insurance [ l dont]. l ended up ringing Tesco [old friends] No hassle, courier was at my door the next morning with the papers to sign, money will be in my account on Thursday 5th May. The difference between Nrock and Tesco monthly repayments for £25000 over 5 years is 2 pounds a week. Worth it for the convenience. Daved

ps_live

daved wrote:

Tried Northern Rock, got accepted in principle but they wanted me to post them my last 3 months wage slips. Hang on while l just go down the tip.

You don't keep your payslips ? :eek:

Glad you got sorted though.

cheers :beer:

Pete

nh

daved wrote:

Dont want a mortgage because of the set up fees and cost of having the surveyor out. I Know the house, its ok. I want the deeds, the house is mine, not the mortgage providers. Tried Northern Rock, got accepted in principle but they wanted me to post them my last 3 months wage slips. Hang on while l just go down the tip. They didn't mention whether or not l wanted insurance [ l dont]. l ended up ringing Tesco [old friends] No hassle, courier was at my door the next morning with the papers to sign, money will be in my account on Thursday 5th May. The difference between Nrock and Tesco monthly repayments for £25000 over 5 years is 2 pounds a week. Worth it for the convenience. Daved

But won't you pay more in the long run because of the higher APRs?

jellyhead

depends how long the loan is spread over, and loan APRs don't seem much higher than mortgage rates at the moment, not the standard rate mortgages anyhow, after the initial fixed rate is ended. switching always involves costs. i can see dave's point. people recommended remortgaging to me when i was looking at a loan for an extension, but remortgage would cost more than the loan! unless i was so skint i needed to spread the loan over my whole mortgage term (25 years) an unsecured loan looked like a much better option. everyone i know is paying higher interest rates on their mortgages than i pay on my loan anyhow.

MoneyMachine_2

If you tell them what the £25k loan is for they may refuse it.
Regulated loans under £25k arent supposed to be used for any business purposes or to finance property purchase and a variety of other things. So be careful what you tell them its for.
Different lenders have different criteria.