What Would You Do

[JinnyJoan]

Some time later this (I hope) I am going to want to get some money from the bank.

I did think of a Credit Card and just pay it off monthly etc but I was talking a wee girl in the bank like for minutes and she was generally saying why wouldn't I think of a loan.

Now I thought you would pay a lot of interest on a loan.  I don't know much about either credit card or loan but what would you do.  

[JinnyJoan]

^^^^ year

[Toorak]

If you can pay off the amount owing on a credit card monthly that is a better option because you will not have to pay interest - if you take out a loan you will have to pay interest for the duration of the loan.

[Tilly2]

 Can you afford to pay off the credit card each month so that you dont accrue interest?

[Buenchico]

Credit cards typically have APR interest rates of around 25% to 35%.  The cheapest bank loans have APR interest rates of between 6% and 10%.  So a bank loan is clearly the better way to go.

https://www.moneysavingexpert.com/loans/cheap-personal-loans/

[Toorak]

Actually, I think I am wrong (if I use my credit card I pay it off in full every month so have never paid interest). Unless the pay off what is owing on a credit card in full you will be charged interest on the amount outstanding. I would ask your bank to tell you what the costs would be of both options.

[Jellybean30]

The interest rate on a credit card is a lot higher than on a bank loan so if you are paying back over a period of several months then apply for a loan.  However, remember than a bank loan is not guaranteed to be accepted as the bank will need to credit score your application to make sure you can afford the repayments.  

 

[gingejbee]

Bank loan. Some of the best rates are from Tesco and Sainsbury, if borrowing £5K -£10K.

The less you borrow, the higher the interest rate.

[hellywelly4]

When I had my kitchen altered I had a bank loan. It was so easy. They know how much money you receive and spend each year. It was really quick too.

[barry1010]

There is still some credit cards offering zero interest for 12 or 18 months

Might be worth checking out 

[gingejbee]

^barry, they may well be on purchases...but probably not on cash.

[barry1010]

You are right, I assumed JJ wanted the loan for a major purchase as she mentioned credit cards

[Barmaid]

One thing to consider is an equity release/life time mortgage. It depends how much you want.   The interest is horrific but you do not make repayments in your lifetime and the interest rolls up until your death/sale of the property.  If you have no dependents it might be worth spending your wealth whilst you are alive.  I would take some advice.

[hellywelly4]

Please DON'T be tempted by equity release. I did it to help a family member out and was absolutely horrified to see the interest they slap on it. 

[barry1010]

Equity release is fine if you have nobody expecting to inherit your assets.  Yes, the interest is high but you'll be dead so won't care

[Peter Pedant]

Please DON'T be tempted by equity release. 

work of the devil - keep away !

[barry1010]

PP, please explain why a person in later years living in the home they hope to spend the rest of their life in should not release the equity if they need money and do not qualify for means tested benefits, especially if they have no family. 

Better to spend the money making life more comfortable and enjoyable than to die with very little or no savings and a house worth an awful lot of money.

[Barmaid]

Yes, the interest is horrific, but if JJ is not bothered about leaving an estate she might as well enjoy the money now.  Horses for courses.

[mjwman]

Depends on how much.

I would look on The Money Saving Expert site (Martin Lewis)

And on Comparisons like Go Compare etc.

 

Sainsburys and Tesco are often very competitive.