Very Short Term loan - advice needed

Minnie_Mad

I am currently in a situation where I need a loan of approximately £1000 in the very short term until 1 July. On that date I receive a lump sum of capital from my XOH. The reason is partly due to an overspend on holiday (my fault) and also because my partner has taken a paycut to move jobs, also he gets paid monthly and I get paid every 4 weeks and there is a two week gap at the moment. His salary does not quite cover all our monthly outgoings.

I want to borrow this money on the shortest timescale I can, cheaply and repay it one 1 July without incurring any costs.

I was going to ask my bank, Barclay's, if I could use an increased overdraft for 6 weeks but their charges will rocket on 1 June so I am not sure if this is the right thing to do?

At least I know it is short term and I don't like to borrow money but at least I know I can repay it soon.

What would anyone suggest is the cheapest way of going about borrowing this sum.

Thanks in advance

Pixie5740

How about a credit card with 0% on purchases for X number of months. As long as you paid the £1,000 off before the end of the 0% promotional period you'll be fine.

Tixy

I agree if a credit card with 0% on purchases may well be the best option, presumably at least £1000 of your outgoings over 2months could be paid for by card?

Regarding your BC account - are you already in an overdraft (and will still be at 1June), if so then the fees may not actually be much higher for an increased overdraft.

E.g. If you were currently using up to £1000 a day then the daily fees for that month would be £22.50 for the month. If they agreed to increase the overdraft to £2k and you were in that overdraft for the whole of June then the total daily fees would be £45, so only actually £22.50 a month for the extra £1000.

Minnie_Mad

Thank you both of those make sense. I went to Barclay's earlier to ask them to clarify how much the overdraft option would be but it is Wednesday and they were shut. I will try again tomorrow.

Do you have any particular credit card with 0% interest in mind, or would that be transfer balances only?

Tixy

You would need a card with 0% on spending, like those here
http://www.moneysavingexpert.com/credit-cards/best-0-credit-cards
you may want to try the eligibility check on that link to give you an indication as to which you may be accepted for.

gingeralan

If you are gonna pay it off on 1st then the increase in won't affect you. Or is it possible that you may not be getting what you expect and you are gonna take a PDL them complain in 6 Weeks when you start getting charged?

Tixy

The new charges come in to effect from 16 June, and the OP has said they will be able to pay off the extra debt by 1 July, so they will be affected for a short while.

Minnie_Mad

Thanks I am looking at the Virgin Money card which does money transfers to current account for a 4% handling fee. I would only need to make one minimum repayment then I would be in position to repay the entire amount before the second one fell due. Good advice here.

fozmcfc

I had a Virgin card, they were great for offering, repeat offers on 0% balance and money transfers. It was so often, I would say only 2 or 3 months of 4 years of having the card, there wasn't an offer on it.

So it's a great card, if you need to spend out on something and can't afford it outright, but could over a 6 - 12 month period, as normally an offer is available to do a money transfer and pay it off with no interest within 12 months.

So my advice, is to definitely keep the card. I only left, cause, mine got switched to an MBNA card, which also offers the same repeat offers.

The only thing to think, is can I borrow the money cheaper elsewhere than 4% interest.

Minnie_Mad

thanks but its not 4% interest its a 4% handling fee on a "money transfer". There are only 2 accounts that do it, Virgin and MBNA, and in my case I am relatively fortunate that I can repay it in July so it is a very short term loan for me. They have just accepted me, and the credit agreement is on its way to me.

ViolaLass

Minnie_Mad wrote: »

thanks but its not 4% interest its a 4% handling fee on a "money transfer".

The point is that you'll have to repay 4% over and above what you borrow - whether it's interest or a fee makes no odds. fozmcfc's point still stands.