Considering Cosmetic Surgery. Funding Advice Please?

Tara_UK

Hi,

I'm considering getting "some work done" and I have a hypothetical question, how should I fund it?

Background: Towards the end of last year I went to the bank to see if it was possible to get a loan. I have never borrowed money before but tended to live in the red a bit in terms of overdrafts but nothing that wouldn't be more than cleared by the next pay day (I'm paid weekly). I was declined but apparently I was "borderline" and I think had I asked for less I could well have got it.

So, I got the Banking App on my phone. I have a savings account as well as my current account. The former has had a positive balance for years but the latter occasionally slipped into the red ("free" overdraft) so now I use the App to transfer money across as I need it, usually about £20 - £40 per week and then "pay it back" when my wages go in. I also shove on average £60 per week or so into my savings account as, despite being on minimum wage, I have a surprisingly large disposable income.

This financial prudence has paid dividends as far as my credit report goes. I have always had a good Credit Score but a lowish credit rating thanks partly to not having any repayment history and the persistent but not permanent overdraft. In February, I applied for a Capital One "starter" credit card which I deliberately used to buy shopping one week, fuel the next and pay off the balance when my wages go in, rarely leaving a balance for the following week. I was then invited "pre-approved" to get another one which I duly did and now alternate between cards, spending on one one week then the other in alternate weeks, always paying off at the end of the week. A couple of weeks ago I treated myself on one of the cards but paid that off in two weeks, just before the monthly statement was due. As a result, my credit file now indicates a good rating but the only thing letting me down is the fact that the credit is a bit new and that for optimum rating I should look at increasing my available credit to £4,000 (currently £2,500 across the two cards). Should I apply for another card or apply to increase my limits bearing in mind they are both less than 6 months old?

So back to the question:

The cost of the "proceedure" is going to be just shy of £4,000, of which I have £2,500 saved. I also have available credit to the tune of a further £2,500 so the operation is affordable, but how should I fund it?

It's a given that I should fund some of it on my credit card for section 75 coverage but should I sort of max out the credit cards and leave £1,000 in my bank "for a rainy day" for example?

The way I see it I have five options:

1. Full savings + £200 (say) credit card + Bank Loan (assuming I could now get one).

2. Full savings + credit cards.

3. Partial savings + credit cards.

4. Partial savings + some credit card + loan.

5. Pay the deposit with a credit card (£500) then fund the rest with a loan, paying off the credit card a week or two later from my savings.

Bear in mind that I would be off work for some time afterwards* and so still need to service direct debits etc from SSP. I pay no rent or mortgage and get water, gas, electricity and broadband paid for by my boss (I live in staff accommodation) but I do pay mobile phone, Sky TV and running my car (DVLA by DD and Insurance already paid for until next May), also I have a weakness for shoes... My SSP should cover my bills but I will need to eat and pay at least minimum balance on my credit cards. Also bear in mind that I am likely to have at least £3,000 in savings by the time I am asked to pay for it. Depending on how long the "lockdown" continues, I may even have the full amount.

I look forward to your ideas.

*I sort of thought six weeks SSP followed by two weeks paid holiday.

[Deleted User]

Savings is the best way.

Rebuild them with what you would have spent on the loan.

On a side note, always wait for your statement before clearing your card in full.  You're looking to show lenders you can manage credit maturely, not change the pretend credit score number.

DCFC79

Savings
I hope your going to use a reputable practice for this work.

Tara_UK

Oh absolutely, they've been in business for 20 years etc. Based in UK.

DrEskimo

As above, just keep saving. In a year or so you should have enough saved to pay for the procedure and still have an emergency fund.

Aim for around 3-6months of expenses as your emergency fund, and then use anything above that for paying for the procedure.

No sense in paying interest charges to a bank if you don't have to. I'm sure you work hard for your income, keep it for yourself.

Tara_UK

Thanks for the advice guys. Waiting until next year is not actually an option.

strawb_shortcake

Hasn't elective and non urgent operations been put on hold? You might find the waiting list pushes you into next year especially if you are looking at reputable surgeons? 

Tara_UK

I had already been given a date for the end of this month so I'd be given priority in any case.

Dr_Crypto

As a junior Dr I worked in plastic surgery for a bit. Interesting job. One grizzled consultant said that people who took finance for operations tended to be the least satisfied with the results and made the most frequent complaints. 

He thought it was because the saw the money coming out every month and this made them fret. 

Just a thought. 

zippygeorgeandben

I really would echo some other thoughts about using savings but if waiting until next year isn't an option then so be it.  However, everyone has had to change what were, pre COVID, immoveable goalposts but things have changed now.  I wish you luck and it seems that you have thought of the best options.  You've come on here to get some advice though and only you know what is right for you, just make sure you are happy and determined with your decision.
Good luck!

Emmia

Will your "staff accommodation" allow you to continue living there for 8 weeks following, what is non-essential (I'm assuming there is no medical need for this) elective surgery? 

I wouldn't take out a loan, I think you should save up and pay for it that way round. But I also wouldn't have the surgery now in anycase, as if there are complications you may end up back in hospital and therefore at greater risk of catching Covid-19.