Do I borrow or use savings?

lynne1307

Hi
not sure if this thread is in the right place moderators please move if need be thanks !.

I need a bit of advice. I've been offered a really good deal, husband is a car sales and has taken a part x. Value 16k, can buy for 11k. My car value 6k so need 5k to make up.

I have the savings, (have 20k saved) I also have 20k overpayed on my mortgage, which I think I can borrow back.
I could also get a loan over 24 months 150 per month, 5% interest.

What do you think the best deal is? or the most sensible option? I have a teenager at uni and am funding savings to pay for his accommodation (5k a year) but am managing to save a little as well to offset this.
any advice appreciated

thanks

DCFC79

Double post here

lynne1307

thats because i didn't know the best place to post it. kind of falls between 2 stools etc.

redpete

Belongs here (loan board) because you are considering getting a loan.

It is not a great idea to borrow money at a considerably higher rate than you are earning on savings and you seem to have sufficient savings for emergencies and planned spending.

Wyndham

What interest rate are your savings getting? What is your mortgage rate? If either of these are less than 5%, then use the savings or the overpayment from the mortgage rather than taking out the loan, as you'll be better off in the long run.

M0ney

I'd use the savings you'd need to earn around 6.5% gross on your savings for it to be cheaper to take the loan.

[Deleted User]

if the car really is worth 16k and you can buy it for 11k why not buy it then re-sell it at a profit?

closed

lynne1307 wrote: »

What do you think is the most sensible option?

Stick with your existing car