Bank loan or 0% finance for home renovation?

EiraF

So we have never taken out finance for anything before, just a bank loan for our car which is very nearly paid off. We have just moved home and have some renovations (mostly flooring) to do, which we realised would be cheaper on a bank loan than sticking on the mortgage which would’ve taken us to a worse interest bracket. However, we’ve realised most of the things we need are available on 0% finance. This sounds great in terms of having no interest to pay, but we’d need it from around 4 or 5 different shops. Is anyone more experienced with finance aware of any issues this may cause? I’m not sure how many finance agreements you can have as we’ve only ever had the bank loan, we’re unsure whether to just get the bank loan and pay the interest or just do it through a few 0% deals (all are collectively affordable over the terms). Sorry for the long post- long time reader first time poster! Thanks  

[Deleted User]

It very much depends on what you're able to get.

0% would be preferable as long as you repay in time. However, the prices of products on 0% deals are generally more than those without.

gizmo111

Probably better off getting a 0% purchases credit card.

Thrugelmir

Remember with 0% finance the interest cost is priced into the product.  Nothing is ever free. 

DrEskimo

How about 0% purchase credit cards? That way you pay no interest and can shop around for the best price?

kimwp

Thrugelmir said:

Remember with 0% finance the interest cost is priced into the product.  Nothing is ever free. 

Is the price not the same if you pay up front? 

enthusiasticsaver

If you have quite a few things to get then I would go for a 0% purchase card rather than take out a loan.  Just make sure you are able to repay during the deal period.  

femalemonarchfemalecanine

kimwp said:

Thrugelmir said:

Remember with 0% finance the interest cost is priced into the product.  Nothing is ever free. 

Is the price not the same if you pay up front? 

quite often yes, I had a sofa on 18 months 0% because the price was the same if I paid there and then or if I had the finance. 

Fighter1986

The point about products available on 0% credit being more expensive is a casual observation that a similar product sold by a company that doesn't offer credit, is likely to be cheaper, as they don't have to build the cost of offering credit into the cost of their products.

The best way to finance anything, ever, is always so save up for it and then pay for it when you actually have the money, but failing that, for the example you've given, a 0% purchase card or 0% money transfer card from the likes of MBNA is likely to be best... A 0% money transfer card allows you to put money into your bank account at 0% from a credit card. MBNA do the best offers of this nature.

Having the funds in your bank account offers greater flexibility as not all retailers who take credit cards offer the best deals - especially when it comes to electricians, plumbers, and fitters. 

Ganga

femalemonarchfemalecanine said:

kimwp said:

Thrugelmir said:

Remember with 0% finance the interest cost is priced into the product.  Nothing is ever free. 

Is the price not the same if you pay up front? 

quite often yes, I had a sofa on 18 months 0% because the price was the same if I paid there and then or if I had the finance. 

I asked DFS for a discount as i wanted to pay cash for a sofa ,they said no ,would rather sell on credit terms for the same price ,crazy i know but we liked the sofa after viewing many.

kimwp

Ganga said:

femalemonarchfemalecanine said:

kimwp said:

Thrugelmir said:

Remember with 0% finance the interest cost is priced into the product.  Nothing is ever free. 

Is the price not the same if you pay up front? 

quite often yes, I had a sofa on 18 months 0% because the price was the same if I paid there and then or if I had the finance. 

I asked DFS for a discount as i wanted to pay cash for a sofa ,they said no ,would rather sell on credit terms for the same price ,crazy i know but we liked the sofa after viewing many.

Yes, I think with inflation, it's financially beneficial to take the finance if the overall price is the same either way, having found the cheapest option for the product you want. Or buy on a 0% purchase credit card. Personally,  it'd be an extra thing to think about and I'd worry about somehow losing the money I'd saved though, so it's not worth it for me unless it's an urgent need like broken boiler in winter.