Best way to finance new computer

shreddedmeat

Hi,

Long story short, I need to purchase some new computer equipment that costs around £1500.

I have around £1000 savings but I don't really want to use more than £500 of it (keeping some back for a rainy day).

I already have a Ratesetter account so I checked the rates for £1000 and have been offered 20.6% APR over 12 months, total repayable £1,104.96.

It strikes me that if instead just borrow the whole £1500 from them at 16% and use my £500 to make a one off overpayment (with help from the MSE overpayment calculator!) I'll pay back £1560; i.e. cost of credit £60 instead of £104, loan repaid in about 7 months. The beauty of Ratesetter is that they don't charge for overpayment.

The monthly repayments are fine on each.

Is this a logical thing to do or have I got my maths wrong?

Cheers

thebritishbloke

I highly doubt you "need" a £1,500 computer. I have no problem with people spending that amount of money on a computer (I own two Macs), but only if you can actually afford it.

A 0% purchases credit card is your best option if you intend to pay it off within a year.

shreddedmeat

I'm a web developer by trade so I need the right computer for the job. I know it's a lot of money but I kept my last machine for 5 years, so I get the use out of them!

Thought about a 0% card, but never had one before, so not sure of eligibility etc

Cheers

Tixy

It would be worth checking out your likely chance of being accepted for a 0% card - http://www.moneysavingexpert.com/credit-cards/best-0-credit-cards?_ga=1.222707539.91994898.1404996998#preapply

But otherwise then yes your suggestion looks reasonable.

jaydeeuk1

shreddedmeat wrote: »

I'm a web developer by trade so I need the right computer for the job. I know it's a lot of money but I kept my last machine for 5 years, so I get the use out of them!

Thought about a 0% card, but never had one before, so not sure of eligibility etc

Cheers

I'm a 'web developer', and also database developer, network admin and photoshoper. I also look after our network and virtual servers. My development machine is a £300 intel NUC core i5 with an msata SSD and 8gb ram running 2 screens (can do more if needed). Runs SQL server 2008 and my gb/several million row databases, IIS, xencenter, sonic wall VPN, dreamweaver, photoshop (and steam ) absolutely fine. A fairly complex query on mine takes 10/11s to run, on one of my 12 core multi xeon servers with 64gb ram the same query takes 8s. I imagine my NUC will be fine for another 3 or 4 years yet, and I could probably sell it for 1/3 of what I paid for it then.

You don't need a £1500 machine, £500 will get you something with an 8 core AMD CPU and 16gb ram, more than enough.

Herzlos

shreddedmeat wrote: »

I'm a web developer by trade so I need the right computer for the job. I know it's a lot of money but I kept my last machine for 5 years, so I get the use out of them!

Thought about a 0% card, but never had one before, so not sure of eligibility etc

Cheers

Then you would know that you don't need to spend £1500 on hardware.

Any old consumer PC will handle web dev tasks easily, even if it takes a bit longer to run heavy database queries. I've been doing software dev for about 15 years and never hit any "must upgrade" limits beyond wanting to batch process media faster.

What are your actual requirements, and what's your shopping list?

The cheapest base unit from PC world/Argos and a decent monitor will do you without issues.

If you really must buy this equipment right now, I'd look at a credit card rather than a loan. But First I'd be looking to cut the bill down a bit or put it off whilst you save up.

shreddedmeat

With all due respect, I come for financial advice and I get vaguely patronising replies telling me I don't know what I need to do my own job? Frankly I haven't told you anything of what my work involves because it's irrelevant isn't it?

FWIW, yes I could write HTML on probably any machine screwed together in the last 15 years but I work at a design agency, where (for better or worse) everyone is Mac based and our workflow is tightly integrated and there's a lot of overlap between roles. For instance if I need to call up 600MB PSDs on the fly while working on a massive after effects file I don't want to be chugging along on a lousy argos netbook. The long and short of it is, I take a lot of work home, I need the right machine to do it on.

ConsumerWizkid

Haha xD You dare seek financial advice! How irresponsible of you!!

I would recommend that instead of seeking a loan for the equipment you need you should cancel all your unnecessary household services such as Sky TV, Gas, Electric, as you don't need these to survive. You can play Solitaire with a pack of cards and use candles for heat and cooking in the meantime, maybe change jobs entirely and work for Asda to get discounts on your food shopping as well, then save £20 a month for 6 years. Debt avoided! xD

TadleyBaggie

If you are going down the Mac route, be aware that Apple are currently doing 0% interest at the moment.

HappyMJ

and....don't forget to budget for the extra insurance cost. Check your contents insurance to make sure it covers a computer of this value and make sure the locks on your house match those specified on your policy. If the locks aren't the best possible locks and the locks are bumped, picked or snapped due their cheapness the stolen laptop may not be covered if you said you had good locks.

You should also get next business day insurance to cover any repairs to the laptop. If it were to die on a Monday you may not be able to work for a week waiting for it to be repaired and lose much more in income than the insurance cost in the first place.

Personally I'd fund it by using a 0% on purchases credit card. However, as this laptop is for business purposes you may also be able to claim the interest as a business expense so a loan to the full amount over a longer term loan may be cheaper.

shreddedmeat

TadleyBaggie wrote: »

If you are going down the Mac route, be aware that Apple are currently doing 0% interest at the moment.

That's my backup option, however I am eligible for education pricing (15% off) from my old student card that lasts til December, and would like to take advantage of that - they aren't doing the 0% on the education store unfortunately!