is it worth borrowing £5000

donnalove

we are in a bit of a dilema
we had a house extension and ran out of money, the house is now livable but is still in need of a few essentials.

there is still leading for the garage and some plumbing work that needs doing also interior doors skirting painting etc and some more electrical work.
the whole house is also in need of carpets and curtains or blinds for downstairs and we need a new bed lol. Then of course there are wardrobes and drawers for the girls bedrooms.

now because we have a fair amount of income we can budget around £400 a month to get this finished which would take at least the next 10 months, but this then leaves us nothing to save or to put some by for emergency's, also the car needs a new gearbox.It would also mean scrimping again.

All in all we have estimated we need at least £5000(to include gearbox on car)to get this lot finished. Would it be worth taking a loan over 2 years so we can get it all finished and still put money away to save? or are we best to just scrimp by for another year?

Also my hubby has 1 default that should have come off his credit report last year but was added a year later than should have, i also have a default that has 4 years left to run( due to a catalougue not producing the credit agreement and not chasing for debt)

We are weary about taking on debt as we have been in a iva and don't want to get in trouble again , but we feel we learned or lesson and we would be more aware of debt this time round, but we are struggling to decide whether to plod on as we are or take loan.
I know you can't make the decision for us but i would appriciate views on which way any of you would work having been in debt before.

thanks
donnalove
xxx

olly300

How much will the loan cost you in total to pay back?

Also for the bits of furniture you need join a freecycle list and pick up anything that is going on it that suits your needs.

Sooler

Budget £300 a month for the work and save £100 a month.
So the work would take longer but I'd rather take the time for the work to be done with no debt. The work may take a year - the debt would last twice as long - and cost more.

May be get one room up to scratch first with curtains, carpets etc. for comfortable living ... and furniture for the girls.

Work out a schedule for the work so you can see it progress to completion.


So this time next year you could either ...

a) have the work completed with no debt.

or

b) work completed with a year of debt to go.

libra10

My advice would be not to take out a loan. Save what you can each month and as you accumulate savings decide which refurbishments are priorities. Obviously the car and necessary repairs will come high on the list.

One of many loan adverts running on TV at present is where someone is requesting a loan of £25000 and is easily given this amount. Text is later displayed on the screen that it will cost £43000! Almost double.

I realise you need nowhere near this amount but cash purchases always cost less than credit, and you'll gain a real sense of achievement refurbishing 'the old fashioned way'. Also no worries about credit repayments.

Good luck whatever you decide.

G-G_4

I would save as the previous poster said.. £300 for the works and £100 savings..

No point saving if you have debts ie. a loan to pay off..

I think this will give you piece of mind, and also will help you budget for any unforseen circumstances.

I'm sure if you can manage then this will be the best option, especially if you have had financial trouble in the past, then you will probably want to make sure that doesn't happen again.

Plus you save interest! :T

Good Luck x

Mikeyorks

donnalove wrote: »

We are weary about taking on debt as we have been in a iva

I think that was intended to be " we are wary ..... about taking on debt"? But it's a Freudian slip that perhaps describes your situation quite well.

If you've both had debt problems - you may find getting a loan (at a reasonable APR) not too easy. Personally I would take a loan and get everything done - but I've always worked in finance and been compelled to have an impeccable credit history - otherwise no job!

In your case I would be both weary and wary of going into debt. Battle your way through the next 10 months using your surplus income (prioritising the essentials - such as the gearbox / weatherproofing the garage). Then, with that level of surplus, get ahead of the game and put some savings aside for the fairly frequent 'rainy days'.