Best way to borrow £25,000

longwalks1

I’m looking to get a loan for home improvements, ideally £25k to £30k.  What’s my best option please, cost wise?

My thought was a loan at 2.9% approx (probably over 5 years) and repay it as normal.  Is there a way of taking the loan and the shifting some/all of it to one (or 2) 0% BT cards?  Would that be worthwhile doing? 

I do have £30k in an ISA that’s returning an average of 9-10% a year so I don’t think it makes sense to touch that.  Or am I wrong?

What options do I have, and what’s advisable please 

longwalks1

I’ve just done the eligibility check on this forum with the soft search and it’s come back as 100% pre-approved with MBNA at 2.8% over 5 years. 

macman

Have you actually been quoted 2.9%, or was that quote 2.9% representative? if the latter, there is no guarantee that you will actually be offered 2.9%.
Unless you have to borrow at a higher rate than the ISA is earning, don't touch it. Remember, once taken out, you cannot put it back.
Since we have no idea of your income or ability to service a loan of up to 30K, it's not really possible to give further advice.

longwalks1

Sorry I should of said.  Income of £60k pa and yes I have the ability to cover the loan and was quoted 2.8%. I was approved soft search for £25,000 loan, so may try for £30k. 

IAMIAM

longwalks1 said:

I’m looking to get a loan for home improvements, ideally £25k to £30k.  What’s my best option please, cost wise?

My thought was a loan at 2.9% approx (probably over 5 years) and repay it as normal.  Is there a way of taking the loan and the shifting some/all of it to one (or 2) 0% BT cards?  Would that be worthwhile doing? 

I do have £30k in an ISA that’s returning an average of 9-10% a year so I don’t think it makes sense to touch that.  Or am I wrong?

What options do I have, and what’s advisable please 

Where is this, interested! 

longwalks1

IAMIAM said:

Where is this, interested! 

It’s a self select ISA, split between Fundsmith, vanguard and Invesco funds.  But that certainly isn’t financial advice!  Remember I’m here asking basic questions about a loan  

DrEskimo

More generally I would evaluate your savings strategy. It makes little sense directing all savings to longer term S&S and nothing to cash savings when you have short to medium term spending targets. Otherwise you end up exactly in this situation of having to borrow money at a cost.

You could apply for 0% purchase CC and use that to pay for materials/etc, and then reduce the amount you borrow on a loan.

longwalks1

Thank you Dr Eskimo, makes sense. I’ve just run my details through the credit card eligibility calculator on here and came back 100% pre-approved for a 0% purchase MBNA card.

my concern is if I apply for a card first and only get, say £2k-£8k limit approved, would the card application potentially impact a loan application a month later for the remaining £17k-£23k?

or does it not work like that?

[Deleted User]

25k is about the most you'd get purely as an unsecured loan. Lenders judge your available credit / debt before giving you money, with a good credit history, you might well get a 0% card with a good limit AND the 25k but you'd never know until you applied and did the hard searches. It might make sense to try for a 0% purchase card and see what limit you get, you could then work out what you can do in stages rather than 25k and trying to get the whole lot done and ending up with some of the loan being wasted on other things

[Deleted User]

IAMIAM said:

longwalks1 said:

I’m looking to get a loan for home improvements, ideally £25k to £30k.  What’s my best option please, cost wise?

My thought was a loan at 2.9% approx (probably over 5 years) and repay it as normal.  Is there a way of taking the loan and the shifting some/all of it to one (or 2) 0% BT cards?  Would that be worthwhile doing? 

I do have £30k in an ISA that’s returning an average of 9-10% a year so I don’t think it makes sense to touch that.  Or am I wrong?

What options do I have, and what’s advisable please 

Where is this, interested! 

A S&S ISA over the long run will make those sort of gains but you need to allow for the fact it will go up and down so it cannot be a short term investment, no-one can time the market with accuracy consistently. Mine is up 45% since the start in mid-2017, so averaging 9% growth a year but it has dips e.g. from the start of this year, it's down ~9% and it's only up ~5.5% since 1/1/21 so if you got panicky and wanted to pull out due to falls, then S&S is not for you.