Loan for saving?

leavereality

Is this a good or bad idea?

on personal loanspage the cheapest loan if I could get it, is 5.6% from AIB (NI)

On Saving page

NS&I Bonds is 6.01% for the year, paid monthly.

So basiclly, pay the intrest monthly and you make 0.41% free money? Or am I missing something.

Cheers

MorningcoffeeIV

You'd need to pay more than the interest monthly. You'd have to make full monthly payments.

Remember also to factor in any tax on the savings interest.

And the fact that you'd need to draw down on your cash to make the payments, so you're earning interest on a diminishing sum.

It doesn't seem worth the trouble for such a tiny return, but you may feel differently.

fatbelly

This used to be done using 0% money from a credit card.

This is called stoozing

adindas

leavereality said:

Is this a good or bad idea?

on personal loanspage the cheapest loan if I could get it, is 5.6% from AIB (NI)

On Saving page

NS&I Bonds is 6.01% for the year, paid monthly.

So basiclly, pay the intrest monthly and you make 0.41% free money? Or am I missing something.

Cheers

Rough calculation, 0.41% on £10k of unsecure loan (say) is just £41. Let alone it is a dwindling sum as there is a minimum amount to pay each month, so it is even less. 

Each to their own but for some people £41 is not worthy considering the work you need to do.

A more profitable to do it is to use  a zero percent interest on purchase or MT credit card. The longer the period, the smaller the one off fee the merrier.

https://forums.moneysavingexpert.com/categories/stoozing-free-cash-from-credit-cards

Alternatively to play a switching current account game. The amount of time you need to invest might be the same but more profitable.