Best use of money
Discussion
Afternoon all,
I'm in the fortunate position of having enough money to pay off my outstanding loan (8.9k/16k) for which I currently pay 3.9% APR / £293pm for the next 33/60 months which would total £9.4k.
My question is - should I pay this off outright with cash, or transfer to a 0% credit card (MoneySupermarket tells me there's a card from MBNA for 33 months 0% cost of £178) and continue to pay £300 a month to pay it off?
The monthly payment wouldn't make much difference either way. Though the cost of paying it off now is "only" a £500 saving, minus the cost of the card.
Could I reasonably expect to make more than £300 over the next 33 months with the 8.9k? If so where? I have 10k in premium bonds, and my ISA maxed out for the year.
Can I use a balance transfer credit card for this type of thing?
Happy to fill in other details if needed.
I'm in the fortunate position of having enough money to pay off my outstanding loan (8.9k/16k) for which I currently pay 3.9% APR / £293pm for the next 33/60 months which would total £9.4k.
My question is - should I pay this off outright with cash, or transfer to a 0% credit card (MoneySupermarket tells me there's a card from MBNA for 33 months 0% cost of £178) and continue to pay £300 a month to pay it off?
The monthly payment wouldn't make much difference either way. Though the cost of paying it off now is "only" a £500 saving, minus the cost of the card.
Could I reasonably expect to make more than £300 over the next 33 months with the 8.9k? If so where? I have 10k in premium bonds, and my ISA maxed out for the year.
Can I use a balance transfer credit card for this type of thing?
Happy to fill in other details if needed.
Borrowing money to try to beat the market is generally unadvisable I believe. Personally I don't like running a bath with the plug out.
You have a known saving of £293pcm against - well, who knows? You might make £300pcm, you might lose it. Unless you choose a 'safe' investment - and that won't pay you 3.9%.
You have a known saving of £293pcm against - well, who knows? You might make £300pcm, you might lose it. Unless you choose a 'safe' investment - and that won't pay you 3.9%.
Simpo Two said:
Borrowing money to try to beat the market is generally unadvisable I believe. Personally I don't like running a bath with the plug out.
You have a known saving of £293pcm against - well, who knows? You might make £300pcm, you might lose it. Unless you choose a 'safe' investment - and that won't pay you 3.9%.
+1You have a known saving of £293pcm against - well, who knows? You might make £300pcm, you might lose it. Unless you choose a 'safe' investment - and that won't pay you 3.9%.
So you're currently going to pay back the loan, plus £769 of interest, so you need to better than 769 of interest off £8900 in 33 months.
The housecrowd do a fixed interest product that pays 7%, which is a portfolio of peer to peer lending, all to property developers and backed by first legal charge over property and the LTVs are rarely more than 70%. It doesn't start paying until 2 months after you invest, so you could earn about £1600. So it depends whether the risk return makes sense to you to earn an extra £800.
It's a risk-return decision, and with investing, only you can make the call about what you think is comfortable.
The housecrowd do a fixed interest product that pays 7%, which is a portfolio of peer to peer lending, all to property developers and backed by first legal charge over property and the LTVs are rarely more than 70%. It doesn't start paying until 2 months after you invest, so you could earn about £1600. So it depends whether the risk return makes sense to you to earn an extra £800.
It's a risk-return decision, and with investing, only you can make the call about what you think is comfortable.
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