What's the best way to get £8000 loan?

jonlb72

Apples2 wrote: »

If you have no savings and up to now haven't been in a position to save each month, how come you can now afford loan repayments?

Yes I am foolish not to have started saving up for my next car 6-7 years ago (infact that's what I'm going to start doing now) I paid my current car off years ago probably took me about half the time I've had it to pay it off.

I'm not attacking any of you for your advice I really do appreciate it and I for one hate being in debt (been there before and had bad credit score for years) I will take on board what you have all said. I'll start a savings ISA account at my bank this weekend and will start putting money away each month. Ok the holiday can wait but the car I will need soon as my current motor is getting poorly. It's only worth about £300 now and if it costs me more than that to put it through it's next MOT in March 2014 then I'm taking it to the scrapyard. What I'm saying is, why not get a new car now whilst I've still got a car that work so I can go around and look for a new one.

DCFC79

ch3101 wrote: »

So what you're saying is that you have 450 left at the end of the month. So this will be say 150-200 paying back the debt and then the other 200 petrol, road tax, car repairs etc...?

This is a question to answer OP, so £450 once bills are paid, is that enough to cover the loan repayments plus petrol, any repairs etc.

Reply #3 from Tixy said " Could you just get a loan for the car and save up the money for the holiday before you have to pay out for it? "

Is that not an option ? If you really work at saving it would take you around 7 months to save the £3k but its dependant when you were planning on going.

jonlb72

DCFC79 wrote: »

This is a question to answer OP, so £450 once bills are paid, is that enough to cover the loan repayments plus petrol, any repairs etc.

Reply #3 from Tixy said " Could you just get a loan for the car and save up the money for the holiday before you have to pay out for it? "

Is that not an option ? If you really work at saving it would take you around 7 months to save the £3k but its dependant when you were planning on going.

If I got a £8000 loan over 5 years I would be paying roughly £150 a month apr would be about 4.9% so yes I could afford that but I would be on a tight budget every month. I'm not sure if I really want that.

I think I might just save up for the holiday now and perhaps get a loan for the car that will cost me about £100 a month over 5 years but I'm going to think about it.

ch3101

I work in a loans company and mainly they are for cars, home improvements and refinancing. I think I've only given 1 person a loan for a holiday this year, and thats out of 230 people and £2.4m.

Also, are you going to get 4.9% ?

If I went through an application with you, as your circumstances are, I wouldn't be expecting the best rate to pop up.

HappyMJ

jonlb72 wrote: »

Just another quick question to anyone reading this. What in your mind is considered normal or ok to get a loan for? When is it justified? Or should we stay well away from borrowing money at all costs? I thought it was the norm for people to get a loan to purchase something like a new car. I don't think many of us have 5k or more saved up for a rainy day. I do have savings but that's to pay the mortage off one day.

A house or a reliable and affordable car or home improvments where the home improvements add value to the house.

In regards to the car...a newer car can be cheaper to run than a £500 car so you need to add up all the costs compared to your current method of transport and see if it's worth it or not. The VED may be cheaper and could save you several hundred pounds per year. The insurance could be cheaper. The maintenance may be much less.

John1993_2

jonlb72 wrote: »

Just another quick question to anyone reading this. What in your mind is considered normal or ok to get a loan for? When is it justified? Or should we stay well away from borrowing money at all costs? I thought it was the norm for people to get a loan to purchase something like a new car. I don't think many of us have 5k or more saved up for a rainy day. I do have savings but that's to pay the mortage off one day.

It may be frequent nowadays for people to borrow money for things like holidays, but it doesn't make it sensible.

For example, the holiday. Do you want one each year? If so, what will you do the next year? You'll still be paying this loan off then, do you take another?

If you follow this route, you'll owe £8,000 constantly. At 10% APR that's £800 in interest every year, for the rest of your life. For what?

You don't end up with any better holidays, car, or anything else than if you'd saved up. In fact the interest means that after a year or two, you'll always have worse ones than if you'd saved.

You are, in effect, signing up to a lifetime of substandard holidays and cars, in order to have the first of each now.

Tiglath

jonlb72 wrote: »

Just another quick question to anyone reading this. What in your mind is considered normal or ok to get a loan for? When is it justified? Or should we stay well away from borrowing money at all costs?

My personal view is that a mortgage is okay, and so is a loan for essential house repairs such as a new boiler (although I'd rather pay cash). Everything else I would class as a 'want' and would rather be disciplined enough to save up for it now. I didn't always have that view, but I learned the hard way when the satisfaction from the frivolous things I got on credit had waned, and I was left paying back debt for years. Not a happy situation to be in and one which causes lots of stress.

Gold_bullion

jonlb72 wrote: »

Just another quick question to anyone reading this. What in your mind is considered normal or ok to get a loan for? When is it justified? Or should we stay well away from borrowing money at all costs? I thought it was the norm for people to get a loan to purchase something like a new car. I don't think many of us have 5k or more saved up for a rainy day. I do have savings but that's to pay the mortage off one day.

If I were you I'd be looking to use what savings I have to buy the car, thus effectively your car "loan" rate would be the rate of interest you're getting on your savings, which I'm guessing is pretty low. Otherwise you're simply wasting the difference between your savings interest rate after tax and what interest you'd be paying on the loan, which is bound to be higher, especially if you admit to spending it on a holiday (which no-one does of course, hence the comment from the person who gives out loans above). When does your mortgage have to be paid off by? I'm assuming it's not in the next year or so, in which case you simply replace this nest egg after you buy the car from the money you would have paid on loan repayments, which in your circumstances I'd suggest should be nearer the £2k mark rather than £5k - you can always trade up later.

I'm sure it would be nice to re-visit SA, but in your circumstances that would be considered a pretty extravagant holiday by most, assuming that you're in good health now and could make it in a few years' time perhaps?

sharpy2010

jonlb72 wrote: »

Hi

I need £5000 to purchase a new car and £3000 to book a holiday next year. What is the best way to get this money?

Work hard and save up your money, thats the best way to get it!

heartbreak_star

I didn't particularly want a banger either, but it's what I could afford so it's what I bought.

Then I started saving hard and now have a slightly newer car that runs better. It still only cost me £1200.

£5k on a car is excessive, and £3k on a holiday even more so.

Post up an SOA on the Debt-Free Wannabee board and see if the nice peeps on there can help you save up.

HBS x