Self employed and can't get credit for a kitchen

[Deleted User]

Ryan_Holden said:

sourcrates said:

Not being funny, but if your on 50k a year, can you not just save up surely ?

I find it strange why those on such high incomes have the need to borrow money at all, 

It might be that the OP can save up or has savings, but doesn't want to take a lump sum out of the rainy day fund and would rather pay a little to borrow it.

In a similar vein, I have a classic car that I'm about to start restoring and I have good savings, but I am still considering a loan so that I don't have to have a big hole in my savings. I'd rather pay the £300-£400 interest for the convenience.

That's the opposite of what this website stands for.
Choosing to pay several hundred pounds interest un-necessarily isn't logical 😲😯

Ryan_Holden

[Deleted User] said:

Ryan_Holden said:

sourcrates said:

Not being funny, but if your on 50k a year, can you not just save up surely ?

I find it strange why those on such high incomes have the need to borrow money at all, 

It might be that the OP can save up or has savings, but doesn't want to take a lump sum out of the rainy day fund and would rather pay a little to borrow it.

In a similar vein, I have a classic car that I'm about to start restoring and I have good savings, but I am still considering a loan so that I don't have to have a big hole in my savings. I'd rather pay the £300-£400 interest for the convenience.

That's the opposite of what this website stands for.
Choosing to pay several hundred pounds interest un-necessarily isn't logical 😲😯

I don't think I agree with that entirely but I absolutely see the logic. It makes sense, if you can afford it, to pay a small charge for the service. The service here in my example would be being able to lay your hand on a lump sum without having to expose yourself financially by having a hole in your savings. 

It's what I intend to do. I have 5 figure savings but I'm going to take out a 5 figure loan and pay the £400/450 interest because I don't want to have a low balance should eventualities occur. I could save, but I want the vehicle I am restoring finished soon and the price is worth it.

DCFC79

FlaatusGoat said:

Yes, I can afford to pay it off all now but that would be silly? I'd rather accrue the interest on that 7-8k from the Chip 3.55% savings account, and then pay it off in full at the end of the term OR do a balance transfer for even longer. Finance 101

Either use your savings or so do as suggested and see about a 0% credit card.

Herzlos

Ryan_Holden said:

I don't think I agree with that entirely but I absolutely see the logic. It makes sense, if you can afford it, to pay a small charge for the service. The service here in my example would be being able to lay your hand on a lump sum without having to expose yourself financially by having a hole in your savings.

But you expose yourself financially by having a loan...

Either way, your net worth is the same, whether you take £7k out of savings or owe £7k to a bank, you're still at £-7k, though lending affordability will be more impacted by the loan which has fixed repayments.

You *might* get a loan rate lower than savings, in which case it makes financial sense, or you might need to try and build up credit history, but that's about it.

Ryan_Holden

Herzlos said:

Ryan_Holden said:

I don't think I agree with that entirely but I absolutely see the logic. It makes sense, if you can afford it, to pay a small charge for the service. The service here in my example would be being able to lay your hand on a lump sum without having to expose yourself financially by having a hole in your savings.

But you expose yourself financially by having a loan...

Either way, your net worth is the same, whether you take £7k out of savings or owe £7k to a bank, you're still at £-7k, though lending affordability will be more impacted by the loan which has fixed repayments.

You *might* get a loan rate lower than savings, in which case it makes financial sense, or you might need to try and build up credit history, but that's about it.

I do understand what you mean, but I think it's a perspective issue.

To me, exposing myself to 7k as a loan means a small payment each month rather than a 7k black hole in my emergency fund.

Herzlos

Yeah, the perspective thing is real and why so many people get into so much trouble. Me included.

With the loan it stops being £7k and turns into just £200/month. But the reality is that you still need to find £7k to make it go away, and banks will see it as you having £200/month less affordability, which may be a big deal if you're trying to negotiate a mortgage.

Ryan_Holden

For sure, but that's where I am sensible. When I build my car and when I take out my loan I will not borrow more than I have in cash. I appreciate that's not something everyone can do, but it keeps me covered in case I rapidly found I had to pay it back in an emergency. 

I'd also never borrow for social life funding (i.e. the car) where there would be a crossover with needing a mortgage deal.