Can anyone help me decide what would be the best thing to do. Financial advise needed
12 January 2010, 06:58 PM
#1
Can anyone help me decide what would be the best thing to do. Financial advise needed
I need to take out a small loan from the bank as i am buying a used car soon. I want to borrow about £5000 but i will be able to pay back about £3000 quite quickly, hopefully within about 4 weeks of taking out the loan, leaving around £2000 owing. I would like to be able to pay the remainder off within 6 months.
I have spoken to my bank over the phone and have been advised that i can have a 2 month interest free loan but the shortest period i can get a loan for is for 1 year. The interest rate is about 14.9%, maybe lower.
If i am able to pay the loan off sooner than the year i will still have to pay the interest for the whole year.
I have some savings that i am adding to the loan and hopefully i will get the car i want for £7-8000. I could sell my car first and take out a smaller loan but i dont want to be without a car so i am borrowing the value of my car in the hope that i will be able to sell mine within a reasonable time, a gamble i know but it is one that i am prepared to make.
I haven't arranged to sit down with the bank manager yet as i am still deciding the best way to get a loan. The adviser i spoke to also told me that i should steer clear of getting finance from a dealer.
Can anyone advise me on the best way to do this please
I have spoken to my bank over the phone and have been advised that i can have a 2 month interest free loan but the shortest period i can get a loan for is for 1 year. The interest rate is about 14.9%, maybe lower.
If i am able to pay the loan off sooner than the year i will still have to pay the interest for the whole year.
I have some savings that i am adding to the loan and hopefully i will get the car i want for £7-8000. I could sell my car first and take out a smaller loan but i dont want to be without a car so i am borrowing the value of my car in the hope that i will be able to sell mine within a reasonable time, a gamble i know but it is one that i am prepared to make.
I haven't arranged to sit down with the bank manager yet as i am still deciding the best way to get a loan. The adviser i spoke to also told me that i should steer clear of getting finance from a dealer.
Can anyone advise me on the best way to do this please
12 January 2010, 07:02 PM
#2
How about taking the £3k out on a credit card - pay it back in the 4 weeks so you don't have interest?
You could take out the full £5k on a CC then pay off the £3k in 1 go and the remaining £2k in the 6 months - sometimes works out cheaper than a loan
You could take out the full £5k on a CC then pay off the £3k in 1 go and the remaining £2k in the 6 months - sometimes works out cheaper than a loan
12 January 2010, 07:28 PM
#7
Scooby Regular
Sara,
Your bank should be able to organise a loan allowing early repayment of an amount without penalty.
Either that or take out two loans, one for the amount you propose to pay off soon and one for the balance. Make sure the first allows early settlment without penalty.
Job done
Either that or wait a few weeks so you only have to borrow £2,000 and not £5,000
Your bank should be able to organise a loan allowing early repayment of an amount without penalty.
Either that or take out two loans, one for the amount you propose to pay off soon and one for the balance. Make sure the first allows early settlment without penalty.
Job done
Either that or wait a few weeks so you only have to borrow £2,000 and not £5,000
Last edited by Devildog; 12 January 2010 at 07:29 PM.
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12 January 2010, 07:34 PM
#10
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As said before you can use a credit card with an interest free period on purchases, or look for a cashback card if you can pay it back before the statement date. That way you will,in effect, be paid for purchasing the car.
12 January 2010, 08:10 PM
#11
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0% credit card would be my choice. I got 0% for 12 months on purchases from Tesco. Use it to fuel my car for work and bridge the gap for mileage claims on expenses.
12 January 2010, 08:14 PM
#12
DD, i asked my bank if i could pay it off early but was told that i would still pay the interest for the full term of the loan. I was a bit surprised when was told i could not have a loan over 6 months.I thought i could more or less dictate how long i paid the loan over. I dont know if all banks are like this. I bank with Barclays.
If i had a spare car i would sell mine first and add that to my savings and a small loan but that is not possible. I have to borrow the money i hope to sell my car for. Bit of a bummer but i cant see a way round it.
I asked a couple of people in the family but it is not an option, especially now that Christmas has just gone, recession etc.
I dont want to wait any longer to sell my car as then it will have less Mot and more chance of me dinging it before i sell it.
In an ideal world i would find a buyer for mine, take a deposit for it whilst looking for a car that i want, find one, pay a deposit on that and then sell mine
I could end up really stuck and not be able to sell mine for ages, if at all.
I found this the other day but i did say i wont get yellow again.
FastJapCars.com : YELLOW DC2 Honda Integra Type Rx 98 spec
I dont want to go to the bank until i have explored all my options.
I am with a cashback site, i will have to look at whats on offer. Sometimes it takes months and months to see your cash though.
It might be worth splitting the loan up too. I was hoping someone would know of a lender offering fantastic rates on small loans
If i had a spare car i would sell mine first and add that to my savings and a small loan but that is not possible. I have to borrow the money i hope to sell my car for. Bit of a bummer but i cant see a way round it.
I asked a couple of people in the family but it is not an option, especially now that Christmas has just gone, recession etc.
I dont want to wait any longer to sell my car as then it will have less Mot and more chance of me dinging it before i sell it.
In an ideal world i would find a buyer for mine, take a deposit for it whilst looking for a car that i want, find one, pay a deposit on that and then sell mine
I could end up really stuck and not be able to sell mine for ages, if at all.
I found this the other day but i did say i wont get yellow again.
FastJapCars.com : YELLOW DC2 Honda Integra Type Rx 98 spec
I dont want to go to the bank until i have explored all my options.
I am with a cashback site, i will have to look at whats on offer. Sometimes it takes months and months to see your cash though.
It might be worth splitting the loan up too. I was hoping someone would know of a lender offering fantastic rates on small loans
Last edited by sarasquares; 12 January 2010 at 08:19 PM.
12 January 2010, 08:18 PM
#13
Scooby Regular
Look for cards that will allow cash transfers into bank accounts - these will be at the purchase rate and not the cash rate.
If your credit is good you should get 4K from both cards. Transfer all of it into your bank account and buy the car. Then sell your current car to pay off one of the cards and shift the rest of debt as you say over 6 months. Use the savings to service both cards until paid off.
Virgin do it and I think Egg do it. This is by far the cheapest way and probably the most flexible. You won't use the cards themselves so cut them up as soon as they arrive. Cancel both cards once they are clear.
That DC2 IMO would be a mistake. If its not a grade 0 (crash repair) I'd be very suprised.
What car do you own now?
If your credit is good you should get 4K from both cards. Transfer all of it into your bank account and buy the car. Then sell your current car to pay off one of the cards and shift the rest of debt as you say over 6 months. Use the savings to service both cards until paid off.
Virgin do it and I think Egg do it. This is by far the cheapest way and probably the most flexible. You won't use the cards themselves so cut them up as soon as they arrive. Cancel both cards once they are clear.
That DC2 IMO would be a mistake. If its not a grade 0 (crash repair) I'd be very suprised.
What car do you own now?
Last edited by EddScott; 12 January 2010 at 08:21 PM.
12 January 2010, 08:23 PM
#14
Look for cards that will allow cash transfers into bank accounts - these will be at the purchase rate and not the cash rate.
If your credit is good you should get 4K from both cards. Transfer all of it into your bank account and buy the car. Then sell your current car to pay off one of the cards and shift the rest of debt as you say over 6 months. Use the savings to service both cards until paid off.
Virgin do it and I think Egg do it. This is by far the cheapest way and probably the most flexible. You won't use the cards themselves so cut them up as soon as they arrive. Cancel both cards once they are clear.
If your credit is good you should get 4K from both cards. Transfer all of it into your bank account and buy the car. Then sell your current car to pay off one of the cards and shift the rest of debt as you say over 6 months. Use the savings to service both cards until paid off.
Virgin do it and I think Egg do it. This is by far the cheapest way and probably the most flexible. You won't use the cards themselves so cut them up as soon as they arrive. Cancel both cards once they are clear.
Are you saying, borrow the whole amount i am going to spend on a car and use my savings to pay off the monthly repayments?
12 January 2010, 08:25 PM
#15
Lol, this is mine
I fell in love with this but it already sold
http://www.pistonheads.com/sales/1268160.htm
Last edited by sarasquares; 12 January 2010 at 08:27 PM.
12 January 2010, 08:27 PM
#16
I would have thought the easiest/least complicated way of doing it would be with a credit card.
Find one with 6/12 months 0% interest. 12 would be best just to give you some leeway. So long as you don't go over the period, you won't pay anything extra, and anything earlier doesn't obviously incurr any fees.
If you are worried you'd be tempted to spend more, cut it up once you've used it to buy the car. Cancel once you've paid the debt off.
Find one with 6/12 months 0% interest. 12 would be best just to give you some leeway. So long as you don't go over the period, you won't pay anything extra, and anything earlier doesn't obviously incurr any fees.
If you are worried you'd be tempted to spend more, cut it up once you've used it to buy the car. Cancel once you've paid the debt off.
12 January 2010, 08:35 PM
#18
12 months 0%. Just depends how much they are happy to lend you. No harm in applying.
Have you asked your own bank what they have on offer re CCs?
12 January 2010, 08:38 PM
#19
Scooby Regular
I think i saw something about this on tv the other day. It was that Martin Underwood bloke, i think thats his name, but you have to get the timing right etc.
Are you saying, borrow the whole amount i am going to spend on a car and use my savings to pay off the monthly repayments?
Are you saying, borrow the whole amount i am going to spend on a car and use my savings to pay off the monthly repayments?
Just apply for two or three cards but do a google search to find the cards that allow cash transfers. It won't take long and the money transfer will be quick too.
I mention Egg and Virgin because Virgin is MBNA so may not be able to get several MBNA cards and Egg is backed by Prudential.
It really isn't complicated and I've done it a few times. BUT You must use ones that allow transfers!!!
Virgin and Egg. Also do another with MBNA directly.
(with respect of course) Your car is a Sport Special and you've modified it which will make it lower value than standard. These are struggling to sell at £2K. I know some are asking £3K but they have been for sale for months. We've been looking at one of these for my wife recently.
You need to be careful putting too much faith in shifting the scoob. Make sure you are fully aware that you might not get what you want for it which might then impact on the time it takes to pay off the cards.
As for the CTR, a much better bet than the DC2 for sure.
If your looking at £8K hot hatches, I'd also consider Audi S3. Bit more "Sophis" than a CTR.
Last edited by EddScott; 12 January 2010 at 08:43 PM.
12 January 2010, 08:39 PM
#20
Credit Cards - Tesco Bank
12 months 0%. Just depends how much they are happy to lend you. No harm in applying.
Have you asked your own bank what they have on offer re CCs?
12 months 0%. Just depends how much they are happy to lend you. No harm in applying.
Have you asked your own bank what they have on offer re CCs?
Tescos might be worth a look. If i can split the amount between 2 or more cards it might just work
12 January 2010, 08:47 PM
#21
Sort of.
Just apply for two or three cards but do a google search to find the cards that allow cash transfers. It won't take long and the money transfer will be quick too.
I mention Egg and Virgin because Virgin is MBNA so may not be able to get several MBNA cards and Egg is backed by Prudential.
It really isn't complicated and I've done it a few times. BUT You must use ones that allow transfers!!!
(with respect of course) Your car is a Sport Special and you've modified it which will make it lower value than standard. These are struggling to sell at £2K. I know some are asking £3K but they have been for sale for months. We've been looking at one of these for my wife recently.
You need to be careful putting too much faith in shifting the scoob. Make sure you are fully aware that you might not get what you want for it which might then impact on the time it takes to pay off the cards.
As for the CTR, a much better bet than the DC2 for sure.
Just apply for two or three cards but do a google search to find the cards that allow cash transfers. It won't take long and the money transfer will be quick too.
I mention Egg and Virgin because Virgin is MBNA so may not be able to get several MBNA cards and Egg is backed by Prudential.
It really isn't complicated and I've done it a few times. BUT You must use ones that allow transfers!!!
(with respect of course) Your car is a Sport Special and you've modified it which will make it lower value than standard. These are struggling to sell at £2K. I know some are asking £3K but they have been for sale for months. We've been looking at one of these for my wife recently.
You need to be careful putting too much faith in shifting the scoob. Make sure you are fully aware that you might not get what you want for it which might then impact on the time it takes to pay off the cards.
As for the CTR, a much better bet than the DC2 for sure.
I know what you are saying about the mods on mine but i am putting the original front bumper back on, newly resprayed, which only leaves the side skirts and bonnet which is a new steel one. The wheels are only a few months old. I still have the original rear spoiler which will go with the car.....And the exhaust
. I think that is all i have changed. I will ask for £3000, if i get it then great but i know that it is more likely that i wont.I am looking for a CTR but i saw the DC2 and thought it could easily end up an impulse buy
.I am going to take a day this week to research some cards and get a proper feel for what is out there.
Last edited by sarasquares; 12 January 2010 at 08:49 PM.
12 January 2010, 09:01 PM
#22
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I did pretty much what you're looking to do a few years ago, and I don't understand why you're looking for a "loan" as such.
I simply asked the bank for an overdraft for 6K (or whatever it was). They agreed, and you simply pay back when and as you can - advantage being that when you get a salary paid into your account you pay significantly less interest for a while, until you eat deeper into the overdraft again.
I paid a chunk off within a few weeks and the remainder over a few months - and looked back and almost laughed at what it had cost me in interest, etc. - from recollection it was around £20, certainly didn't go into 3 figures.
For the flexibility, I thought this was very cheap and very simple to arrange - it took a single phone call and amount 10 minutes.
It's the way I'd do it again if I ever needed to.
DN
I simply asked the bank for an overdraft for 6K (or whatever it was). They agreed, and you simply pay back when and as you can - advantage being that when you get a salary paid into your account you pay significantly less interest for a while, until you eat deeper into the overdraft again.
I paid a chunk off within a few weeks and the remainder over a few months - and looked back and almost laughed at what it had cost me in interest, etc. - from recollection it was around £20, certainly didn't go into 3 figures.
For the flexibility, I thought this was very cheap and very simple to arrange - it took a single phone call and amount 10 minutes.
It's the way I'd do it again if I ever needed to.
DN
12 January 2010, 09:06 PM
#23
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From experience,
Sell the scoob first, that way you know what you need / have to play with...
the "I'll get £xxx for it" , often turns into "Hmm i only got £xx for it"
Not only that, all the time you have the two cars, its two lots of tax insurance etc...
And why are you buying another car, if the scoob is ok, then stick with it
I had my scoob sitting on the drive for near on a year, before it was
sold,!!!, that didn't help my finance plans at all!!!
Mart
Sell the scoob first, that way you know what you need / have to play with...
the "I'll get £xxx for it" , often turns into "Hmm i only got £xx for it"
Not only that, all the time you have the two cars, its two lots of tax insurance etc...
And why are you buying another car, if the scoob is ok, then stick with it
I had my scoob sitting on the drive for near on a year, before it was
sold,!!!, that didn't help my finance plans at all!!!
Mart
12 January 2010, 09:09 PM
#24
I did pretty much what you're looking to do a few years ago, and I don't understand why you're looking for a "loan" as such.
I simply asked the bank for an overdraft for 6K (or whatever it was). They agreed, and you simply pay back when and as you can - advantage being that when you get a salary paid into your account you pay significantly less interest for a while, until you eat deeper into the overdraft again.
I paid a chunk off within a few weeks and the remainder over a few months - and looked back and almost laughed at what it had cost me in interest, etc. - from recollection it was around £20, certainly didn't go into 3 figures.
For the flexibility, I thought this was very cheap and very simple to arrange - it took a single phone call and amount 10 minutes.
It's the way I'd do it again if I ever needed to.
DN
I simply asked the bank for an overdraft for 6K (or whatever it was). They agreed, and you simply pay back when and as you can - advantage being that when you get a salary paid into your account you pay significantly less interest for a while, until you eat deeper into the overdraft again.
I paid a chunk off within a few weeks and the remainder over a few months - and looked back and almost laughed at what it had cost me in interest, etc. - from recollection it was around £20, certainly didn't go into 3 figures.
For the flexibility, I thought this was very cheap and very simple to arrange - it took a single phone call and amount 10 minutes.
It's the way I'd do it again if I ever needed to.
DN
Something else to look into, thanks
12 January 2010, 09:18 PM
#25
From experience,
Sell the scoob first, that way you know what you need / have to play with...
the "I'll get £xxx for it" , often turns into "Hmm i only got £xx for it"
Not only that, all the time you have the two cars, its two lots of tax insurance etc...
And why are you buying another car, if the scoob is ok, then stick with it
I had my scoob sitting on the drive for near on a year, before it was
sold,!!!, that didn't help my finance plans at all!!!
Mart
Sell the scoob first, that way you know what you need / have to play with...
the "I'll get £xxx for it" , often turns into "Hmm i only got £xx for it"
Not only that, all the time you have the two cars, its two lots of tax insurance etc...
And why are you buying another car, if the scoob is ok, then stick with it
I had my scoob sitting on the drive for near on a year, before it was
sold,!!!, that didn't help my finance plans at all!!!
Mart
I spose i could always put it up for sale on the condition that a non returnable deposit be paid on it and i have 2 weeks to find a car i want and do it that way. At least then i am more in control of what i am able to pay back.
I dont want to keep the car as i want something smaller and more practicle.I have had it for 7 years now and want something different.
12 January 2010, 10:46 PM
#26
Do you have a mortgage Sara?
You could extend your mortgage while the repayment rates are low, then over-pay for 12 months or put reduce things back by offsetting what you borrow when you cash in your motor.
Not all mortgages will allow this though - and I am not totally sure about the mechanics of it.
You could extend your mortgage while the repayment rates are low, then over-pay for 12 months or put reduce things back by offsetting what you borrow when you cash in your motor.
Not all mortgages will allow this though - and I am not totally sure about the mechanics of it.
12 January 2010, 10:52 PM
#28
Do you have a mortgage Sara?
You could extend your mortgage while the repayment rates are low, then over-pay for 12 months or put reduce things back by offsetting what you borrow when you cash in your motor.
Not all mortgages will allow this though - and I am not totally sure about the mechanics of it.
You could extend your mortgage while the repayment rates are low, then over-pay for 12 months or put reduce things back by offsetting what you borrow when you cash in your motor.
Not all mortgages will allow this though - and I am not totally sure about the mechanics of it.
12 January 2010, 11:05 PM
#29
+1 for getting 3K extra on your O/D. 2K on a 12 month loan. If you can explain to the bank how you intend to clear the O/D within a month they can't be too worried about "Toxic Debt" On the flip side, they make less out of you. WHATEVER YOU DO DO NOT GO TO ONE OF THOSE PAYDAY LOAN COMPANIES ON TV at 2345% APR