I need some financial advice off you ladies. Atm we are paying £189 a month for our car (finance) and tbh it is knackered and were planning on giving it back (its hire purchase) but theres a few things that need doing to it to put it up to speed before we can give it back (theres a scratch on the back, needs a new tyre and i think a new gear box!). We cant afford any of these things and were going to need a new car anyway so we were thinking about getting a loan so we can get the reapirs done and send it back.

Ive just looked on moneysupermarket and for a 6K loan its only £135 a month (so we would be saving £50 a month anyway). We can spend £500 on getting car fixed, 2k on a new car, pay for our flights for our holiday in June and get our house finished (bathroom needs tiling etc)

Im just a bit scared getting myself into debt that way as ive never had any loans/credit cards before (car is in hubby name atm). Ive had a quote and weve been accepted.

Just keep putting my curser over the "accept" button but keep getting scared haha.

What u think?
x

I think you should - but I am assuming that is over 4 years or something? That's quite a long time to have a loan - especially if you are only using 2k for the car - you may need a new car before that loan is paid off?

Would it not be better to pay it off quicker, less interest too - and pay the same/similar to what you pay now?

i would maybe do it but not for that amount , if you only need £2500 or the car, do you really need an extra £3500?

Yes thats a good thought. We would have spent more on a car but tbh we have done this in the past and it seems that every car we buy nw matter how much we spend they always end up breaking!! x

pinkyd wrote:

i would maye do it but ot for that amount , if you only need £2500 or the car, do you really need an extra £3500?

I know where your coming from but weve talked it through and we really need to pay for the holiday and flights as its worrying me so thats £1,000. Plus we are going to sell the house later in the year so there will be sols fee's etc and we really just want some money there as a nest egg in case things go wrong. We never have any money to fall back on and rely on my mam far too much with financial burdens. Would be nice not to ask!

hmm...loans can be expenive as nestegss/fall back on money - cos you are paying interest on money you havent yet spent!

Have you considered asking for an increased overdraft - that way you only pay interest on what you use - you would save loads

I wouldn't advise getting a loan as a fall back/ nest egg. Getting a loan to pay off the car loan and get yourself a better car is probably quite sensible though but do consider making the maximum repayments you can afford to avoid paying more interest than you really need.

I always think you should only use a loan for something that is going to last at least as long as it takes you to pay off the loan so...
cars, doing up your house and not a lot else. It might seem like a good idea to pay for your holiday with a loan but you will still be paying for that holiday in 3 years' time.

(there is a theory that if you spend £1000 on a credit card and only make the minimum repayments it will take you 16 years to pay it back)

I think the loan for the car yes but not for anything else... i'd be a bit wary of using a loan to pay for a holiday... and definately not for a nest egg.

it seems good when you look at the monthly figure but when you add it all up you realise how much of a rip off loans actually are...

I'm sure your mum would rather help you out than have you taking out loans for things x

NOOOOOOOOOOOOOOO! dont do it. BIG HUGE MASSIVE mistake!! x

We took out a 10k loan to clear our car finance, as a bit of a nest egg about 18 months back. It is costing us over 300 a month and it is hanging over my head like a huge weight. We have very little left in our savings account too as we ended up using it for bills as I had two periods of long term sick leave and very little money coming in.

Think very seriously beforehand, I can't wait to september 2012 when it is cleared

I dont think I would get a loan tbh.

I had loads of loans, credit cards, etc. when I was younger and ended up getting in such a muddle. I was robbing peter to pay paul half the time and took a lot of hard work to get out of it.

My OH got a loan out a couple of yeas ago and really regrets it now.

x