Take out full personal loan or half/3 quarters?

dkts

hi,

just wondering if i'm thinking straight:

basically say i get a loan out of £20k (the max given) and I only need £15k.
is it better to take the full loan of £20k and use the £15k, whilst saving/setting aside the extra £5k for emergency use (not using it to repay loan back monthly) but of course the higher loan amount would eat into my monthly spend (going out/eating/shopping etc) when paying back loan monthly.
or 
is it better to take out £15k (less charge from interest, percentage wise e.g 3% on 20k vs 3% on 15k ) and save each month the money saved from re-payements? (think it works out £90 difference a month £20k loan vs £15k loan - which would take 4.5 years to save £5k at £90 saved a month).

reading this back i think i answered my own question but interested to see what others think.

thanks!

[Deleted User]

Borrow only what you need.  

But you should build up an emergency fund before even considering a loan of that size. If you haven't already been saving, you woun't be able to afford the loan payments.

dkts

yes so, i have savings, and the loan is needed for an upfront cost (which the total would include contribution from my savings), of course if i had the up front cost in savings i wouldnt take out a loan and im guessing loans are paid back using future savings? so i recon i can afford to pay it back. i suppose my question is, if its sensible to get £5k upfront rather than putting aside £90 each month for 4.5 years to make the difference...this is separate from any other savings i do, say i save £300 a month for other things etc

[Deleted User]

No, it;s not sensible to buy savings. 

Grumpy_chap

I agree with ZX81, it makes no sense at all to borrow money and put it in the bank.

[Deleted User]

Don't ever assume you will get the 3% apr headline rate, only 51% of those approved get that.

JReacher1

venison said:

Don't ever assume you will get the 3% apr headline rate, only 51% of those approved get that.

I don’t believe this is true. 

Legally at least 51% of applicants have to be given the headline rate but more than 51% of applicants can receive the rate. The assertion that 49% of applicants won’t receive the headline rate is I believe wrong.