Talk to me about loans/credit checking

emv

I need to borrow about £30k to fund a house purchase/renovation (mortgages not working out for us, it's an unusual property). I can get credit card cash advances of about £15k (calculated on % of credit limit on 3 cards, all currently with a zero balance) and can easily afford repayments on a £15k loan over 5 years. (I will no longer be paying a mortgage of £800/month so will have enough cash to cover all debts).


But which do I do first? Apply for the loan then credit card advances? As if I max out credit cards I may be less likely to get a loan? If I get a loan, is this likely to affect my chances of getting the credit card advances?


I've used the Money Supermarket loan facility, there seem to be a couple of loans we could apply for at about 4.5% APR (Hitachi & Tesco are two). Seem reasonable?


Em

dealer_wins

Bear in mind that credit card companies may baulk at the size of your planned cash advances, and block them way before £15000.

Surely the cheapest and most straightforward option would be to apply for a £30000 secured loan? And if the lender insists on a longer than 5 year repayment period due to affordability, you can overpay each month to clear it in 5 years.

2005eyeball

The issue with a secured loan is that we are moving so if we secure it against our old home (in order to have the finds to be able to move) then will it be portable/secured against new building (which is only part-residential, hence mortgage issues). And cash advances are interest free for 18 months too.

Tixy

Cash advances are very unlikely to be 0% for 18 months. Do you mean money transfers? And if so do all 3 cards you already have offer money transfers (only a few providers offer these). And have you factored the money transfer fees in to your calculations?

The cheapest way would likely be cards that had 0% on purchases for x months. Assuming that at least half the cost of your build is items that can be paid for by credit card.

Will you be able to pay off the whole of the £15k on cards before the end of the 18month promo deals?

But which do I do first? Apply for the loan then credit card advances? As if I max out credit cards I may be less likely to get a loan? If I get a loan, is this likely to affect my chances of getting the credit card advances?

Better to apply for a loan before building up significant debt on your current credit cards.

I've used the Money Supermarket loan facility, there seem to be a couple of loans we could apply for at about 4.5% APR (Hitachi & Tesco are two). Seem reasonable?

It sounds like you need the loans before you sell your existing house. So will there be a period where you need to service your existing mortgage plus £15k purchases on credit cards plus the loan repayments? - presumably you have worked out what the minimum payments on each of your cards will be and ensured you can afford all the repayments? (if you are accepted for a loan it may not be at the representative APR of 4.5%, so worth checking if you could also afford repayments if the loan was a higher APR).

emv

I think I do mean money transfers, yes & all 3 cards do offer that, just had letters offering them again (2 cards are same provider, one for me, one for husband). Nothing really can be paid for on card so need the cash up front initially.


Yes we can afford the repayments, the minimum + loan payments are pretty low then as soon as the mortgage has gone we can minimise the credit card debt.

AFK_Matrix

Just to clairfy are the offers you have had for your credit cards offers of Balance transfers or Super Balance transfers as there is a difference.

The Balance transfers means you will get X months 0% interest on money you transfer in from another credit card. A super balance transfer means that you can transfer money in from this credit card into your current account for a fee, usually around 3-4%.

There are very few super balance transfer cards around which makes me think the credit cards you have have got 0% balance transfers.

emv

They are super balance transfers, so money directly into current account, 0% interest until September 2015, 2% fee.