We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

Ratesetter

freeman22
freeman22 Posts: 9 Forumite
Part of the Furniture Combo Breaker
I am looking to borrow 5k to replace my aging Volvo (I hate spending money on cars so would never buy new) and wondered about the lender Ratesetter. It seems to have a competitive APR and this is currently advertised as 4.10% (fixed) I wanted to borrow the money over 36 mths and should have no problems meeting the payments. I also have about 9k in savings (all in my Santander 123 account) which is topped up by 2 salaries each month so I always have an average balance of about 10k. So with the credits I receive from my bills + the interest, after tax I receive around £25 per month (not a bad rate imo)

I don't want to buy the car out of my savings as I did this once and didn't put the money back (whereas you have no choice with loan repayments - to make them)

So - can anyone recommend Ratesetter or possibly another avenue of funding that I could utilise?

Many thanks

Comments

  • What are you saving for?

    It's almost always better to pay off debts with savings. You're wasting money if you don't because interest rates on savings are lower than those on borrowing.http://www.moneysavingexpert.com/savings/pay-off-debts

    The only avenue of borrowing that would be financially savvy would be to buy the car with a 0% purchases card and then repay the balance before the 0% period ends.
    Grateful to finally be debt free!
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    I've just gone on to the Ratesetter website and it shows an APR of 7.9% for a loan.

    There's no way that your savings are making as much as that in interest so if you hate spending money on cars then it seems ludicrous to borrow £5,000 @ 7.9% APR to buy one.

    If you did use your savings could you not just set up a standing order to transfer £138.89 to your savings account on pay day for the next 36 months?
  • freeman22
    freeman22 Posts: 9 Forumite
    Part of the Furniture Combo Breaker
    From the web: Top 6 rates for a £5,000 loan over 36 months

    RateSetter
    4.3% Representative APR
    Representative example: If you borrow £5,000 over 36 months at a Representative APR of 4.3%, with a £15 borrowing fee and an annual interest rate of 4.10% (fixed) you would pay: £148 (monthly payment) total cost of credit £332 total amount repayable £5,332


    Sounds like a good deal?
  • DCFC79
    DCFC79 Posts: 40,610 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    freeman22 wrote: »
    From the web: Top 6 rates for a £5,000 loan over 36 months

    RateSetter
    4.3% Representative APR
    Representative example: If you borrow £5,000 over 36 months at a Representative APR of 4.3%, with a £15 borrowing fee and an annual interest rate of 4.10% (fixed) you would pay: £148 (monthly payment) total cost of credit £332 total amount repayable £5,332


    Sounds like a good deal?

    No way of knowing if you will get the 4.3% until you apply, just use your savings.
  • 27col
    27col Posts: 6,554 Forumite
    If you have the will power to save regularly. As you apparently do.
    Then why on earth would you not be able to continue doing that after you have bought another car. You are just throwing away money in interest, just for the lack of a bit of will power.
    I can afford anything that I want.
    Just so long as I don't want much.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    freeman22 wrote: »
    From the web: Top 6 rates for a £5,000 loan over 36 months

    RateSetter
    4.3% Representative APR
    Representative example: If you borrow £5,000 over 36 months at a Representative APR of 4.3%, with a £15 borrowing fee and an annual interest rate of 4.10% (fixed) you would pay: £148 (monthly payment) total cost of credit £332 total amount repayable £5,332


    Sounds like a good deal?

    I dont know what what website you're looking at but that rate isn't advertised on Ratesetter's website.

    A 4.3% APR is ok but there are lenders offering better rates out there if you're their ideal borrower.
  • sxcizme3010
    sxcizme3010 Posts: 265 Forumite
    Seventh Anniversary 100 Posts Combo Breaker
    A 4.3% rate in fab for a loan and peer to peer lenders are great. I went with lending works - hassle free and had the money 48 hours later. Id personally use my savings though and just set up a SO to pay the loan amount into my savings but if you want to take a loan then sounds like a good deal.
  • I applied with ratesetter a while ago as the advertised rates were very low (~ 4%). I have decent salary, no defaults, home equity, more than enough disposable income etc etc etc


    I received an offer at ~ 13%!


    lol
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 347.2K Banking & Borrowing
  • 251.6K Reduce Debt & Boost Income
  • 451.8K Spending & Discounts
  • 239.5K Work, Benefits & Business
  • 615.3K Mortgages, Homes & Bills
  • 175.1K Life & Family
  • 252.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.