Finance Query

Hammys-Hungry · 13 June 2018 at 4:40PM

Hi, first time posting here and just looking for some advice.

I am going to (hopefully) be purchasing an item (not a car) on finance, however I have never applied for finance before and have a few question about if i will get accepted.

Some information:

Annual income: £24k
Item cost: £1215
Deposit: £255 (more than 10% minimum)
Monthly repayment: £80 for 12 months

However, I have an overdraft limit of £1850 on my account and £500 on a joint account.

When it comes to applying for finance i will have roughly £1500 in my account. So here are my questions.

1) Should I move £500 into the joint account to clear that OD and have £850 OD on my account (which i will be applying for finance on).
2) Probability to get accepted.
3) Is it better to go for 12, 24 or 36 months repayment, in getting accepted for finance?
4) Should I put more than £255 down?

MallyGirl · 13 June 2018 at 5:00PM

what are the fees on the ODs
what is the finance APR?
choose the shortest option you can afford

Hammys-Hungry · 13 June 2018 at 5:09PM

Hi,

Fees on OD are 0 for my account
1p for every £7 over on joint account
and its interest free so im assuming 0% APR

and yeah i was thinking 12 months is best

Thank you for responding

System · 13 June 2018 at 5:17PM

If its interest free finance then assuming you can't get at least 5% discount for paying in cash get it on finance even if you have enough money to buy it outright.

Example:
Sofa £1500, 0% finance for 12 months. Total price paid over 12 months, £1500.

£1500 in savings account at 5% interest. Total amount that £1500 is worth at the end of 12 months = £1575.

If you pay the sofa with the £1500 of savings you don't earn the interest on the savings so it has "cost" you £75 extra to buy the sofa using the money in your savings over doing it on interest free finance.

But as I said, if you can get it cheaper paying in full than the interest on £1500 would earn then do that instead. Ultimately its about making your ££££ work as hard as they can for you. Rule of thumb is if the interest on the savings is more than the finance then get the finance, if the interest on the finance is higher than the savings then use the savings.

Edi81 · 13 June 2018 at 7:39PM

These types of finance are usually really easy to be accepted for. They are very rarely looked at by a human and are usually automatically accepted or declined.

Key thing is being on electoral role and no defaults.

Hammys-Hungry · 14 June 2018 at 10:22AM

I've been on the electoral role in my local area for a couple of years now and what is a default?

System · 14 June 2018 at 11:38AM

Hammys-Hungry wrote: »

I've been on the electoral role in my local area for a couple of years now and what is a default?

When you've not paid something such as a loan or credit card and continued to not repay the arrears so it goes from a late payment marker to you being in breach of the contract and defaulting.

Hammys-Hungry · 14 June 2018 at 12:38PM

Thank you for clarifying, I have not had that thankfully

Finance Query

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