£3k, 2 years, 20 year old.
Discussion
So as above, I'm after a £3,000 loan over 2 years.
My background is that I'm 20 years old and rent and pay all the bills for a house on my own. I earn a decent salary for my age and have already been accepted for a loan of this agreement with no problems. My financial situation is good and have been managing my money fine since moving into my own (rented) house 18 months ago. Never had debt, overdraft or anything of the sort. My girlfriend moves in this month officially after me supporting us both for a little while so there is now 2 incomes in the household meaning my expenses for the bills falls dramatically.
I want it to fund a car. My insurance is up in the next week or so, but so is my MoT and tax. The car I have now is going to need some work on it to get it through its MoT and getting it sorted isn't finically viable, so I'm better off replacing and getting something I've wanted for a while.
I've only checked with my bank who, as I said, with no problems accepted me.
My question is what's a reasonable amount of APR%? They wanted £158p/m for 2 years meaning an APR of 26.5%; making a total amount payable of nearly £3,800. I can afford this fine, but to me seems a very, very high rate. Is it? Or is it that roughly what to expect on this amount over this time?
What APR is reasonable to aim for?
Please no " just save" comments.
My background is that I'm 20 years old and rent and pay all the bills for a house on my own. I earn a decent salary for my age and have already been accepted for a loan of this agreement with no problems. My financial situation is good and have been managing my money fine since moving into my own (rented) house 18 months ago. Never had debt, overdraft or anything of the sort. My girlfriend moves in this month officially after me supporting us both for a little while so there is now 2 incomes in the household meaning my expenses for the bills falls dramatically.
I want it to fund a car. My insurance is up in the next week or so, but so is my MoT and tax. The car I have now is going to need some work on it to get it through its MoT and getting it sorted isn't finically viable, so I'm better off replacing and getting something I've wanted for a while.
I've only checked with my bank who, as I said, with no problems accepted me.
My question is what's a reasonable amount of APR%? They wanted £158p/m for 2 years meaning an APR of 26.5%; making a total amount payable of nearly £3,800. I can afford this fine, but to me seems a very, very high rate. Is it? Or is it that roughly what to expect on this amount over this time?
What APR is reasonable to aim for?
Please no " just save" comments.
As above. 3k is best off on a 0% card if you make sure you do a balance transfer before the time is up. You should look to pay 3k off before the 0% period is up if possible
Edited to add, 3k over 18 months is £166. Your idea makes no sense compared to this option mate
Edited to add, 3k over 18 months is £166. Your idea makes no sense compared to this option mate
Edited by DeanR32 on Saturday 2nd August 15:56
CubanPete said:
Thanks for the link. Having a look now.DeanR32 said:
As above. 3k is best off on a 0% card if you make sure you do a balance transfer before the time is up. You should look to pay 3k off before the 0% period is up if possible
I will absolutely be able to pay it off early, even on my own, but with my OH moved in and the drop in expenses less than a year is very likely. I'd rather keep it as a 2 year agreement however and just pay it off early rather than force myself into a shorter agreement. After all, if god forbid we broke up I can still repay it myself.DeanR32 said:
As above. 3k is best off on a 0% card if you make sure you do a balance transfer before the time is up. You should look to pay 3k off before the 0% period is up if possible
Edited to add, 3k over 18 months is £166. Your idea makes no sense compared to this option mate
Ok then. I don't quite understand it so stay with me on this.Edited to add, 3k over 18 months is £166. Your idea makes no sense compared to this option mate
Edited by DeanR32 on Saturday 2nd August 15:56
I get a 3k credit card that has a 0% interest rate for 18 months. Max it out for the cash. By said car with the 3k. Repay £166 for 18 months. Is that right?
jamesedwards said:
Ok then. I don't quite understand it so stay with me on this.
I get a 3k credit card that has a 0% interest rate for 18 months. Max it out for the cash. By said car with the 3k. Repay £166 for 18 months. Is that right?
Yes.I get a 3k credit card that has a 0% interest rate for 18 months. Max it out for the cash. By said car with the 3k. Repay £166 for 18 months. Is that right?
So £8 a month more, for 6 months less.
But don't take it out as a cash advance.
Is it at a dealer or not? All dealers will accept a CC.
jamesedwards said:
It is NOT a dealer so does this mean a CC wouldn't work? Why shouldn't I take it as a cash advance?
Thanks
This isn't something I have done, so I am out of my remit a bit and there's more experienced folk here who could advise on using a CC to pay a private individual without suffering the horrendous CC fees for a cash advance. Thanks
Perhaps paying via PayPal would be one way round it?
TheLordJohn said:
This isn't something I have done, so I am out of my remit a bit and there's more experienced folk here who could advise on using a CC to pay a private individual without suffering the horrendous CC fees for a cash advance.
Perhaps paying via PayPal would be one way round it?
What you've just said is exactly what put me off a CC. Being tripped up by the fees on something I don't fully understand can be a killer. Thanks for the advise.Perhaps paying via PayPal would be one way round it?
Anyone else got any experience of this method?
You'll also incur fees if you move from one card to another at the end of the interest-free period (usually 2-3% of the total being moved). I don't think the credit card route is an option for you under the circumstances you mention.
If you're not happy with the interest rate on the loan you've been offered, could you look to borrow from a family member and pay them back over that time-frame with a lower rate of interest?
If you're not happy with the interest rate on the loan you've been offered, could you look to borrow from a family member and pay them back over that time-frame with a lower rate of interest?
Funk said:
You'll also incur fees if you move from one card to another at the end of the interest-free period (usually 2-3% of the total being moved). I don't think the credit card route is an option for you under the circumstances you mention.
If you're not happy with the interest rate on the loan you've been offered, could you look to borrow from a family member and pay them back over that time-frame with a lower rate of interest?
No to a CC then.If you're not happy with the interest rate on the loan you've been offered, could you look to borrow from a family member and pay them back over that time-frame with a lower rate of interest?
I've been self reliant for a while no I'd would rather keep it that way. Also, it would be very handy for it to improve my credit score for the future.
Virgin Credit cards allow cash advance as part of the 0% rate - I know as I did it last year.
But they only allow a certain % of your total credit to be used as a cash transfer.
For this sort of amount putting it on a credit card at 0% really is a no brainer.
IF you can find one that allows 0% cash transfers.
http://www.moneysupermarket.com/credit-cards/money...
Infact looking at this link Virgin still offer it and will do 0% for 29 months.
But they only allow a certain % of your total credit to be used as a cash transfer.
For this sort of amount putting it on a credit card at 0% really is a no brainer.
IF you can find one that allows 0% cash transfers.
http://www.moneysupermarket.com/credit-cards/money...
Infact looking at this link Virgin still offer it and will do 0% for 29 months.
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