Loan Advice needed for Home Improvement!

pokhim

Hi All,

I'm getting my kitchen replaced and have decided on an Ikea kitchen which costs around £1900. I also need to pay quite a bit in tiles, plastering, fitting etc etc.

With Ikea, I can get an interest free loan to pay off the amount over 12 months or so. However I still need an extra c.£5k for the rest of the kitchen.

I was thinking about my options as builders are unlikely to take payments in installments...

I called virgin money (my mortgage bank) they offered 5.79% over 21yrs at £34.2pm and £199 arrangement fee. Or the lowest term was 5yr at £95.8pm and £199 fee.

Barclays (my personal bank) offer 9.9%...far too high.

Moenysupermarket ratesetter.com is offering 4.8%...

Any other ways in order to get the cost down??...

19lottie82

remember they don't offer everyone the advertised rates, they only legally have to offer this to 51% of the applicants that they accept.

bear in mind if you pay a 5k loan back over 21 years (to me this is wild!) you will be paying almost 9k back!
If you want to keep costs down, pay it back as quickly as you can.

also, you don't want to be applying for a load of loans as this will have a negative effect on your credit file.

Look for the lender with the best advertised rate, and apply for that, see what happens.....

19lottie82

ps 5k seems v expensive for the kitchen fitting? on top of the kitchen units?

stator

You could always buy the tiles on a 0% credit card and just pay for the labour in cash

Pixie5740

What is the term of the Barclays loan? On the face of it 9.9% (is that APR?) sounds higher than Virgin Money's 5.79% (again is this APR) loan but you need to consider whether these interest rates are fixed or variable, and keep in mind that the longer you have the loan the more interest you will pay in order to compare apples with apples.

£5,000 does seem like a lot when it doesn't include the units which you've bought from Ikea. stator's suggestion to use a 0% credit card is a good one although you might not be able to pay workmen using a credit card.

AFK_Matrix

Also look at Super Balance Transfer Credit Cards which give you a certain amount of months of 0% interest on the balance transfer. I am still in 2 minds about doing this my self as I have several things I want done on the house.

Basically get one of these cards and it will allow you to transfer money from the CC to your current account upto the limit of the credit card. I got one a while ago with a 4k limit but you won't know the limit until you get the card. You will also have a fee for doing the transfer which can be upto 4% I think.

downhillfast

As above ^^^ Definitely look at a money transfer credit card. I've just got one to fund a vehicle purchase... £6500 limit which gives me £6250 cash in the bank for a one off fee of 4% which is £250... interest free for 29 months.

Martin's info on Money Transfers...

pokhim

Thanks for the replies.

Yes those rates were APR and fixed.

The fitting costs havn't been set in stone yet, I'm getting the quote all tided up tonight.

I will certainly have a look at the 4% money transfer CC, as it looks like one of the best options if I can pay it all back within 29months.

downhillfast

pokhim wrote: »

I will certainly have a look at the 4% money transfer CC, as it looks like one of the best options if I can pay it all back within 29months.

There is a card that does 32 months I think but they didn't offer me a high enough limit when I applied.