What’s the better deal on a £331 purchase?

jeans420

Using PayPal credit on a purchase of £331, but I’ve got 2 options:

1. 0% interest for 4 months, still have to make minimum payment each months. I can likely pay it off in September by either selling my current laptop (once I’ve repaired it) or using student loan. In these uncertain times neither are guaranteed, but hopeful! 

2. £16 a month for 24 months with interest which adds up total to £374. I can pay it off early but not sure if that incurs interest? 

Not sure which to go with as the minimum payment is unclear, but I don’t want to incur interest if I don’t have to ! 

[Deleted User]

It all depends on the standard rate of option 1 and when you would actually clear it.

D3xt3r5L4b

Save up and pay in full up front 

redux

The standard rate I can find is 19.9%, and your option 2 seems to be a bit lower, maybe 14.5 to 15%

If so, and if you were to pay £16 a month to either, option 1 may be actually slightly (about £5) cheaper in 24 months. If you expect to pay off faster than that, option 1 has an increasing advantage the faster you go.

I assumed no penalties for repaying option 2 early, just the interest as it works out.

guardian loan calculator is useful, no political comment implied, I just like its format