Help with Loans.

Scorpiojon

Hi all. I need a little help, i've never borrowed money in the form of a loan or credit card so im a little - ok alot unsure..

I'm looking to borrow £1200. I'm Employed. Earn around £26k a year. Never missed payments on phone, car insurance, overdraft etc..

Heres the question.

If i borrow £1200 from my bank (Lloyds) the APR is 18% over 24 months.

Now if i borrow £7,500 the APR is 5.4% over 24 months.

Can i borrow £7,500 spend the £1200 and pay back the £6,300 straight away therefore leaving £1200 to pay @ 5.4% or does it not work this way?

My first thought is it's not allowed otherwise wouldn't everyone just do it for the lower APR if they only want to borrow a small amount.

Or is the credit card the way forward? as repayments wouldn't be a problem.

Any help appreciated.

Gaz83

Scorpiojon wrote: »

Hi all. I need a little help, i've never borrowed money in the form of a loan or credit card so im a little - ok alot unsure..

I'm looking to borrow £1200. I'm Employed. Earn around £26k a year. Never missed payments on phone, car insurance, overdraft etc..

Heres the question.

If i borrow £1200 from my bank (Lloyds) the APR is 18% over 24 months.

Now if i borrow £7,500 the APR is 5.4% over 24 months.

Can i borrow £7,500 spend the £1200 and pay back the £6,300 straight away therefore leaving £1200 to pay @ 5.4% or does it not work this way?

My first thought is it's not allowed otherwise wouldn't everyone just do it for the lower APR if they only want to borrow a small amount.

Or is the credit card the way forward? as repayments wouldn't be a problem.

Any help appreciated.

You would need to check the small print of the loan to find out if you could make early repayments, and if you could do this without charge. Some banks will let you, some won't.

A credit card could be a better option depending on how long you intend on paying back the amount. How much disposable income do you have per month on your £26k salary?

dealer_wins

Also your repayments wont reduce, just the loan term!

thebritishbloke

Easier way will be to just get a 0% purchases or 0% money transfer credit card. In the grand scheme of lending, £1,200 is a very small amount of money.

iolanthe07

if I borrow £7,500 the APR is 5.4% over 24 months.

You may not get the 5.4%. This is a headline rate offered to 51%of successful applicants. You may be offered a much higher rate.

Scorpiojon

thebritishbloke wrote: »

Easier way will be to just get a 0% purchases or 0% money transfer credit card. In the grand scheme of lending, £1,200 is a very small amount of money.

Yeah after sitting back and thinking on it your right. I managed to get a 0% purchase card for 13 months. Plenty of time to pay it off and cut it up.

Thanks for your help.

Edit: I also set up the direct debit for the minimum amount just to be safe.

SparklesJD

Or look into a loan from your local credit union. No fees for early repayment (although many offer fixed rates no matter what the amount anyway) or admin. Interest rates vary, but usually very competitive.

Martin's view on them is here: http://www.moneysavingexpert.com/banking/credit-unions

You can find your nearest one here: https://www.findyourcreditunion.co.uk