Multiple purpose loan

DrEskimo

Bert85 said:

@DrEskimo I understand, but I cannot have still works going on in my house with my 1 year old son. Moreover, my car is beyond repair, unless I want to spend more money than the car.
And about that, the car dealership - used car - proposed me a £295/month PCP for 4 years, I do not want to have a PCP since I would like to own the car outright. What is the big difference between monthly payments of £295 and £330?

What's wrong with the car and how much will it cost?

£330/month was a personal loan that included money for your house. The £295/month PCP is just to borrow on a car.
PCP substitutes lower monthly cost, but as a result costs a lot more in interest charges. Compare the total cost of interest and you will see. You will also have to think about what you will do in 4yr time when you still owe the final lump sum payment. How will you pay for this?

I generally find PCP to be an awful financial product. There are occasions on new cars were very low/zero interest and high deposit contributions can make it OK (providing you have the funds elsewhere). On used PCP this is rarely ever the case...It's typically just an extremely high cost interest loan.

Cut costs, save money and reduce the costs of the car/work you need to doing.

enthusiasticsaver

PCP is an awful and expensive product.  Not only do you have the repayments which are quite high usually but also the balloon payment which you have to pay before the car is yours.  I agree that if you cannot save up for a car then a personal loan is the way to go. I would not do the car and the house works at the same time though.  Figure out which is more urgent and just get a personal loan for that and either overpay then take out another one for house works or save up for the house works. 

npuk512

Bert85 I am thinking of doing a similar thing - home improvements and car using one loan, primarily because it is cheaper to borrow more in one loan than two smaller loans. Have you managed  to do this? When I look at some loan applications online, they seem to have the option of picking one purpose or the other. Does anyone know, if I pick "car purchase" and then spend a part of the money on renovation, will that be a problem?

Vikipollard

A bit late to the party, but I would also ask why not repair the car?  It will cost a lot less than buying a new one.  My DH's car has recently cost us £1700 in repairs (all four fuel injectors, diesel particulate filter, things like that) on a car worth maybe £3k if the wind is favourable as it has over 125k on the clock.  We know its history, that it's been serviced at correct intervals, and looked after.  

Our choices were to spend £1700 for a car that's been great, which we've owned for 5 of its 8 years, or £10k on something comparable.  We chose the £1700, and paid for it from our emergency fund.

Fast forward three weeks, and due to the rain we've had, the canopy over our bay window has collapsed, needing urgent repairs.  Yes, we should've repaired it before. We have the money in our emergency fund to cover the cost.

The reason for telling you this is simple; we *could* have opted for a £300+/month loan for three years to buy a car which depreciates from the moment you pick it up - and then we'd have had to pay for the emergency house repairs on top of a loan commitment.  (No, we wouldn't have still had the £1700, as that would've been part of the deposit.)

I'd urge you to reconsider.  Having been in a financial hole in the past, I am paranoid (I admit) about debt, particularly in these uncertain times.  There is no such thing as a guaranteed income any more.