Two smaller loans or one larger loan?

clare33

Hello

I imminently need to borrow for two items of planned expenditure (1) for a new to me (used) car (2) for new windows / door for our house.

I will need approx £5,000 for the car (to add to what I have saved and my part exchange) plus I am expecting to need about the same amount for the windows, pending quotes. Car I would like to repay over 3 years. Windows maybe 2-3 years.

Most loan companies have better rates for over £7,500 so I wondered whether it would be better to aply for one loan to cover both amounts?

If I applied for two separate loans in a short space of time would this be frowned upon and therefore may not get as good a rate?

Another option I have thought about is to get a long zero % on purchases credit card for the windows - as we may be able to pay these off a bit quicker than the car loan.

I have a good credit rating (I think!) and no current debts apart from the mortgage.

Any advice? Thanks in advance.

somethingcorporate

Financially one larger loan will make more sense although you may get better prices on cars/windows from signing up to their (likely far more expensive) finance options.

I'd suggest getting the larger loan but not too large and have the discipline to pay back any excess back in to the loan.

Herzlos

You'll get a better rate on a larger loan, and likely lower payments than 2 smaller ones as you'll be more likely to stretch the term a bit.

But it all depends on the offers you're being made; it might be more likely to get credit from the suppliers than a bank, if your history is off any.

DCFC79

Remember your credit rating means nothing, its your credit history that's taken into account.

poppasmurf_bewdley

When getting quotes for new windows, don't just use the nationally advertised companies. Get some quotes from local companies as well. When we did this, we found the locals were about half the price of the national companies.

Don't forget - Everest means very, very high. It wasn't named that for nothing.

clare33

I've totally had it with speaking with car dealerships about their finance options. They were trying to persuade me into a PCP and making out I was just stuck in my ways preferring to get a loan and own the car at the end of the term. Next time I enter a garage I will just say I am paying cash and sort out the finance in the background!! Rant over back to the matter in hand...

Credit history should be all good, I think I had one late payment to a credit card many moons ago (5 + years) just due to me forgetting to make the monthly payment on time, d'oh, but other than that have had credit cards and loans and all paid in time etc.

Re: windows I have a local firm with supposedly a good reputation round tonight. Won't touch the nationals after a bad experience (which was actually with a pushy local) years ago. My OH escorted him out of the house! Don't know where thse people get off!!

Pixie5740

clare33 wrote: »

I've totally had it with speaking with car dealerships about their finance options. They were trying to persuade me into a PCP and making out I was just stuck in my ways preferring to get a loan and own the car at the end of the term. Next time I enter a garage I will just say I am paying cash and sort out the finance in the background!! Rant over back to the matter in hand...

The dealerships make more money selling you the finance than they do selling you the car. I enjoy the merry dance with them. I negotiate a discount of a few thousand off the price of the car and agree to take their finance which I am usually assured is cheaper than a personal loan when actually they are comparing a flat rate with APR so apples and oranges really. I just smile politely, take the discount, take the finance and then pay it off straight away with my savings.

clare33

Pixie5740 wrote: »

The dealerships make more money selling you the finance than they do selling you the car. I enjoy the merry dance with them. I negotiate a discount of a few thousand off the price of the car and agree to take their finance which I am usually assured is cheaper than a personal loan when actually they are comparing a flat rate with APR so apples and oranges really. I just smile politely, take the discount, take the finance and then pay it off straight away with my savings.

Interestiggn that explains things! So the finance options don't have any early repayment clauses generally?

Herzlos

poppasmurf_bewdley wrote: »

When getting quotes for new windows, don't just use the nationally advertised companies. Get some quotes from local companies as well. When we did this, we found the locals were about half the price of the national companies.

Don't forget - Everest means very, very high. It wasn't named that for nothing.

Yeah, don't touch a window company you see on TV. Ask your neighbours/friends who they used.

Pixie5740

clare33 wrote: »

Interestiggn that explains things! So the finance options don't have any early repayment clauses generally?

I don't think I've ever paid one but it depends on the T&C of your particular financial product. Any discount that taking the finance gives you should eclipse any ERC to make it worthwhile.