Ben G
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Registered: 12th Jan 07
Location: Essex
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okay, well i want/need a newer car and really like clio 182's.
i can get a credit card that has 0% on purchases for 13 months (tesco), but i can also get a loan through sainsburys for 5k over 2 years with an APR of 8.6% which equates to a total repayment of £5442.
what i'm wondering is whether it's better to:
- use the 0% credit card for the car (card limit will cover the cost of the car) and then if it's not paid up in 13 months, transfer it to either another interest free credit card if there is one about or get a loan out to pay the rest off
or
- just get a loan out from the start and pay it all off in 24 months.
i can get a loan for 4k through sainsburys, but then it falls into their higher APR rate of 12.8% meaning a repayment of £4524 with a monthly repayment of £188.49 instead of the higher £226.77 for the 5k loan.
it won't be just yet anyway, will most likely wait until march-april time but i like to prepare first.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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Quick answer is what is cheapest.
Best option is to pay off the 0% card within 13 months.
Even if you miss that, a few months at 15 ish % probably won't exceed the interest on the other loan.
Don't overlook fees to move the CC debt. Most will charge 2/3%, which on a balance of a few grand make 0% look less tempting.
[Edited on 23-12-2010 by Ian]
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Ben G
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Registered: 12th Jan 07
Location: Essex
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cheers ian, sound advice.
i already have 2k in a bank but saving that for things around the house rather than a car purchase.
then i have the puma and could probably sell that for 1k and pay off part of the credit card.
it's confusing me 
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dannymccann
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Registered: 9th Aug 06
Location: Doddington, Lincolnshire
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Lets call it a 2 year pay off for both options.
£4k loan costs you £524
£5k (/24 = £208 a month) @ 0% for 13 months = £2704 paid off after 13 months leaving £2296 @ 3% bal transfer = £2365 left to pay, overall costing you £69
That transfer fee looks quite low though, someone tell me if Ive worked that out wrong?!
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Rob_Quads
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Registered: 29th Mar 01
Location: southampton
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Be aware that if you need to get a loan for the 2nd year you may not get the same %age because you are taking out less money which the banks don't like
When I built my extension we budgeted 4K. It worked out CHEAPER to take out 5K loan over the 2 years than the 4K would have due to the better rate.
It ended up handy as we needed the money in the end but was still the best route as even if you don't use it then you just use the extra to pay off the last few months of payments.
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Ben G
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Registered: 12th Jan 07
Location: Essex
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yeah i will probably go for the 5k loan as it's cheaper over the course of the loan to take out 5k than 4k an the extra money will come in handy.
hopefully there will be some lower APR offers in a few months time.
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A2H GO
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Registered: 14th Sep 04
Location: Stoke
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Look into the Ts & Cs on lump sum repayments.
If there are no charges get the £5k loan and pay off £1k using the money straight way. Leaving with a £4k loan on the lower interest rate.
With my current loan (Natwest) they allow lump sum repayments with no charge but if you pay the loan off there's a charge on the % you pay off. So technically if you owe £3k you could pay off £2999 with no charge, and then pay the loan off using £1 and just get charged a % of this. 
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A2H GO
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Registered: 14th Sep 04
Location: Stoke
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Also, it might be better to have the loan over 5 years to bring the payments down and then overpay.
Ie. £4k loan over 2 years = £150pm
£4k loan over 5 years = £70 pm. Then overpay by £80pm as no interest is charged on overpayments and so will be paid off in less than 2 two years.
[Edited on 23-12-2010 by A2H GO]
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Ben G
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Registered: 12th Jan 07
Location: Essex
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all it seems to say is this:
Fixed rate. An early redemption charge will apply. No arrangement or administration fees. Typical APR 8.7%.
which i'm guessing means you will be charged for paying it off early?
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Cavey
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Registered: 11th Nov 02
Location: Derby
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quote:
Originally posted by A2H GO
Look into the Ts & Cs on lump sum repayments.
If there are no charges get the £5k loan and pay off £1k using the money straight way. Leaving with a £4k loan on the lower interest rate.
Always wondered if you could do that, e.g. £7.5k loan at 8% when you just want £2k or so, if you could just pay back the £5k straight away then be left with your £2k loan at a low interest rate.
But I guess that would be why they charge an early redemption fee
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A2H GO
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Registered: 14th Sep 04
Location: Stoke
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Redemption means paid off completly, ie. settled in full.
All your doing is making an overpayment/capital repayment with some of the balance remaining, which in most cases there is no charge for, but check it out first.
[Edited on 23-12-2010 by A2H GO]
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Ben G
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Registered: 12th Jan 07
Location: Essex
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brilliant, cheers. will hae to phone them up nearer the time and ask them about over payments.
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Ian W
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Registered: 8th Nov 03
Location: Wirral, Merseyside
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From my experience no company allows overpayments.
I took out a Sainsburys loan in the summer to buy a new car. I cleared the loan once I sold my old car (can't get to work without a car so this was the only option). Early repayment fee was 1 months interest.
[Edited on 27-12-2010 by Ian W]
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Ben G
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Registered: 12th Jan 07
Location: Essex
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1 months interest isn't bad i suppose.
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Tommy L
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Registered: 21st Aug 06
Location: Northampton Drives: Audi wagon
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I would go for the CC.
You have that little bit more flexibility with repayments.
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A2H GO
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Registered: 14th Sep 04
Location: Stoke
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quote:
Originally posted by Ian W
From my experience no company allows overpayments.
I took out a Sainsburys loan in the summer to buy a new car. I cleared the loan once I sold my old car (can't get to work without a car so this was the only option). Early repayment fee was 1 months interest.
[Edited on 27-12-2010 by Ian W]
Overpayments are different to settling early. I would imagine most providers charge for early settlement. Very few charge for overpaying.
By paying £1000 off a £5000 loan, you are making an overpayment, not settling the balance.
Also the early settlement charge is sometimes a % of the payment made to settle the loan, as mentioned earlier. My NatWest is 10% of the amount settled. If owed £5000 and settled the full £5000 I would be charged £500. If I overpay by £4999 leaving £1. Then paid off the £1 in a separate transaction I would be charged 10p.
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Pop
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Registered: 8th May 03
Location: Reading
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Surely they limit overpayments to a % of the remaining balance per year.
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Rob_Quads
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Registered: 29th Mar 01
Location: southampton
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Some may not limit the over payments but as mentioned if you finish the loan early then it will charge an early settlement fee.
Some may let you have 5K...let you pay back 4K straight away but it will not adjust your monthly payments so you will still end up paying it early as you will only have to pay a few installments and then the loan will be gone.
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A2H GO
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Registered: 14th Sep 04
Location: Stoke
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quote:
Originally posted by Pop
Surely they limit overpayments to a % of the remaining balance per year.
I've paid £5.5k off off my £7k loan this year with no charges or letters telling me I can't pay anymore off.
When I paid a lump sum of £5k off they asked if I wanted the monthly payments adjusting or if i wanted to continue paying what I was paying each month on £7k. I kept it the same.
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Pop
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Registered: 8th May 03
Location: Reading
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quote:
Originally posted by A2H GO
quote:
Originally posted by Pop
Surely they limit overpayments to a % of the remaining balance per year.
I've paid £5.5k off off my £7k loan this year with no charges or letters telling me I can't pay anymore off.
When I paid a lump sum of £5k off they asked if I wanted the monthly payments adjusting or if i wanted to continue paying what I was paying each month on £7k. I kept it the same.
You learn something new everyday
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VegasPhil
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Registered: 16th Jan 05
Location: Fareham, Hants Drives: Octavia VRS
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Let me know how you get on dude. I applied through Sainsburys and was declined. 
I have a decent credit history afaik and my credit profile says the same.
Don't know whether to give it a shot applying elsewhere or go for finance (Although I don't want to tag anything to the car). I have seen offers coming to light from Santander might give them a shot.
I bank with Halifax but they offer no decent loan deals for me. I have a headache about this
Corsa 2.0 16v Vegas - Sold
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Ben G
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Registered: 12th Jan 07
Location: Essex
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will do mate, although the missus' now wants to move (only been in our 1st home for 7 months) so a new car might not happen for a while now bloody women!
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dannymccann
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Registered: 9th Aug 06
Location: Doddington, Lincolnshire
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quote:
Originally posted by Ben G
will do mate, although the missus' now wants to move (only been in our 1st home for 7 months) so a new car might not happen for a while now bloody women!
You must be kidding IIRC you spent ages a) saving up for this and b) picking out the right place based on area, commute and all the rest of it, and after 7 months she wants to upsticks again...
If shes not on the deeds, bin her 
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Rob_Quads
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Registered: 29th Mar 01
Location: southampton
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If you can afford to move up now is the time, well unless your own house has lost value then it's not quite so good
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Ben G
Member
Registered: 12th Jan 07
Location: Essex
User status: Offline
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quote:
Originally posted by dannymccann
quote:
Originally posted by Ben G
will do mate, although the missus' now wants to move (only been in our 1st home for 7 months) so a new car might not happen for a while now bloody women!
You must be kidding IIRC you spent ages a) saving up for this and b) picking out the right place based on area, commute and all the rest of it, and after 7 months she wants to upsticks again...
If shes not on the deeds, bin her
i know , thats exactly what i said to her, but this new place is 1 mile down the road in the same town and is a repossession so is very cheap compared to other properties down the same road according to rightmove.
probably won't get it as there will no doubt be a lot of interest but we're still going to have a look and see what it's like to have that extra space.
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