Interest Free loans

Culla100

Hi collective knowledge of the internet, So my Fiance and I have just bought a house requiring extensive renovation. We are needing to install a new Kitchen, Bathroom as well as buy furniture (its our first home). We have been looking at a few places for these various things and most offer Interest free payment plans...i.e. pay a deposit (usually 10%) then pay the rest off over a specified time period by monthly payments without any additional cost compared to paying total upfront.



To me this sounds fab, but is it really? Also how many of these interest free loans/payment plans can we actually take out, can we get our kitchen, bathroom and sofa, or just the kitchen for example? How do they affect your credit score?


Any help, advise, previous experience would be much appreciated!

poppasmurf_bewdley

These interest free deals are not free to the purchaser. The cost of the finance is rolled up in the cost of the item.

Last year, I bought two sofas from a local furniture shop at a price which was about half that charged by DFS and the like for a similar item.

But if you want the credit facilities, you either have to suck it up, or get an interest free credit card and pay it off before the interest free period ends.

lindens

or don't do the work until you have saved up the cash

spadoosh

A lot of places offer interest free borrowing but not everyone is accepted for them. More often than not you dont know the rate of interest you will be paying until you apply. This will be based on your credit history and affordability.

They can be bad and good. Theyre bad when you take out loads of them and you put yourself in a situation where you cant repay them, theyre good when you dont pay any interest on the borrowing.

You can have as many as a lender is willing to give you, usually the better your credit worthiness and affordability the more chance of being accepted for multiple offers.

Id avoid doing anything just yet. This is more to do with living in your house as opposed to being anti debt. As its a new house to you, you need to learn how it fits for you. I appreciate work might need doing but its better to do the work right. For this reason i suggest living in the property for a while to work out exactly how you want to do things.

Its things like lighting that can really dictate the look and feel of a room. Lets say you have poor light getting to your kitchen, dark oak units would be no good. Obviously right now the light will look a lot better than in the middle of winter, you plan your summer kitchen and when it gets to winter it looks awful.

This time will also help you prioritise work that needs doing. SO your doing the kitchen, the electrics are ok but some will need to be done for the kitchen. At that point its worth thinking about doing a rewire. If you decide to rewire, you might hold off the decorating and furniture until its done.

Nebulous2

If you limit yourself to retailers offering 0% finance you may well find yourself paying more than you need to for the item.

A 0% purchases credit card would allow you to shop around much more widely.

You could find yourself being declined for the finance if they think you are already over-indebted, they still require a credit check.

You also need to watch affordability. Each one will have a monthly payment and that could hit you with a heavy repayment schedule which was difficult to afford, regardless of the fact you aren't paying interest.

Culla100

Thanks for the advice, sadly we cant live in the house before getting work done as prior to us buying it it had been flooded by a burst pipe so has had to have all internal features ripped out, Currently is just four external walls and a roof. So we need to get at least a Kitchen, bathroom and bedroom done before we can live in it. Well that's our plan at least, and then yes we plan to do the rest once we know better what we want.

Pixie5740

How many loans you can have at any one time is based on your affordability and credit history, note that's history not score, and each lender will have its own way of determining whether to lend to you or not.

I ended up installing an IKEA kitchen a couple of years ago and I am very happy with it. I did purchase it using 0% finance but that wasn't my reason for using IKEA it was just an added bonus. Rather than looking at headline rates you need to look at the total overall cost. Using the example given by poppasmurf DFS might be offering 0% finance but their products are more expensive so the cost is greater than buying elsewhere and using some other form of credit.

If you genuinely need a new kitchen and bathroom look at alternative ways of funding it such as a low interest personal loan or 0% purchase credit card or 0% money transfer card etc rather than just shops offering 0% finance deals.

As for furniture get second hand stuff from Gumtree and charity shops to tide you over, except a mattress get a decent mattress. One of the best interior design tips I read was to get a cheap second hand sofa until you decide how you want to decorate the living room. Too often people rush out and blow a large chunk of their budget on a sofa which then ends up dictating what colours, fabrics and flooring you're stuck with before you've even had a chance to live in the room and see how you use it.

Culla100

Pixie5740 wrote: »

How many loans you can have at any one time is based on your affordability and credit history, note that's history not score, and each lender will have its own way of determining whether to lend to you or not.

I ended up installing an IKEA kitchen a couple of years ago and I am very happy with it. I did purchase it using 0% finance but that wasn't my reason for using IKEA it was just an added bonus. Rather than looking at headline rates you need to look at the total overall cost. Using the example given by poppasmurf DFS might be offering 0% finance but their products are more expensive so the cost is greater than buying elsewhere and using some other form of credit.

If you genuinely need a new kitchen and bathroom look at alternative ways of funding it such as a low interest personal loan or 0% purchase credit card or 0% money transfer card etc rather than just shops offering 0% finance deals.

As for furniture get second hand stuff from Gumtree and charity shops to tide you over, except a mattress get a decent mattress. One of the best interior design tips I read was to get a cheap second hand sofa until you decide how you want to decorate the living room. Too often people rush out and blow a large chunk of their budget on a sofa which then ends up dictating what colours, fabrics and flooring you're stuck with before you've even had a chance to live in the room and see how you use it.

Cheers Pixie, yes I think your and others definitely right about Sofa, we do have an old one from our rented place and have decided although small and un-comfy it will tide us over for a while till we decide on our plan for the living room. I hadn't thought about other loans or credit cards for interest free purchases etc, certainly will be something I will look at. We do have some other second hand bits of furniture as well which will get us through- bedroom wise but yes will need new mattress and also agree its better to buy new. Having slept on the mattress which came with our rented flat for the last three years I can definitely say that whilst I can pass with second hand bed frames a new matress is a must. Cheers again:beer:

foxy-stoat

Did your planning before buying a house that you couldnt live in was to try for interest free credit
suppliers?

Assuming you didnt need a mortgage for the property, you ought to of had enough cash to put in a basic kitchen and bathroom.

I would get a few money transfer credit and balance transfer credit cards and dont spend too much.

tonyh66

Im surprised you got a mortgage, generally you can't, if a house has no kitchen/bathroom (can't remember which it is).

foxy-stoat

Culla100 wrote: »

Thanks for the advice, sadly we cant live in the house before getting work done as prior to us buying it it had been flooded by a burst pipe so has had to have all internal features ripped out, Currently is just four external walls and a roof. So we need to get at least a Kitchen, bathroom and bedroom done before we can live in it. Well that's our plan at least, and then yes we plan to do the rest once we know better what we want.

Doesnt sound like it would of been mortgage-able based on this so assume you had the cash to buy it?