Want a Loan under £5000? Get an MBNA "Rate for Life" Credit Card @ ~ 6% & Transfer Cash to your Current Account - HotUKDeals
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This is more of a heads up after looking through an MSE article.

If you need a loan for under £5000, you will have noticed that the rates range from between 12.9% and 18.7% - Quite expensive.

If you apply for an MBNA Rate for Life Credit Card, any balance transfers to it within the first 60 days are charged at 5.9% + 1.5% initial fee.

The advantage with the MBNA Card is that you can transfer money into a bank account of your choice rather than the normal providers limitations of just from other credit cards.

An example to show how good an offer this is:
Amount borrowed: £4000
Per month payment (up to you): £80
Effective Interest rate: 6.6%

This low rate is more obvious when working out the total amount payable. Example:
Amount borrowed: £3000
Per month payment: £235
Total amount repayable £3151.22 (Would be repaid in 14 months).

Probably won't be for everyone, but if you're after a second hand car or similar, this is by far the cheapest way to go about it. (Just compare it to your local car dealers finance offer).

Use this calculator on Martin Lewis' site to check for amount repayable & effective rate.
http://www.moneysavingexpert.com/loans/plastic-loans#calc
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All Comments

(21) Jump to unreadPost a comment
Comments/page:
#1
I'm not an expert but wouldn't a personal loan (or overdraft) be cheaper than a credit card?
1 Like #2
if you NEED a loan? no, its about want. you dont NEED to get in to debt, some people want to though. Credit cards are the worst invention ever
#3
Good idea! Hot, thanks for the heads up
#4
pet2000
I'm not an expert but wouldn't a personal loan (or overdraft) be cheaper than a credit card?

No. Not if the loan amount is under £5000 (and in some cases under £7500).
See MoneySavingExpert.com's Loan Rate Page for current rates.

batistawhc
if you NEED a loan? no, its about want. you dont NEED to get in to debt, some people want to though. Credit cards are the worst invention ever

Point taken, title changed.
Credit cards are actually the cheapest way of borrowing for less than £5000.
See http://www.moneysavingexpert.com/loans/plastic-loans

jb66
Good idea! Hot, thanks for the heads up

I'm glad somebody got the point.

Love how people are voting cold. Cheaper £5000 (or £7500 for that matter) loan rate please?

£7500 loaned on card, paying £235 a month over 3 years works out at 7.1% APR.

Please, find me this on a loan.

Edited By: adambaz on Oct 04, 2010 20:03: meh.
#5
Heat added, some people arn't good at math.
#6
I read the raates on MSE (between 8-15%). That's criminal. Banks can borrow money for under 1% at present. Just shows nothing has changed.
#7
Good deal if needed.
#8
pet2000
I read the raates on MSE (between 8-15%). That's criminal. Banks can borrow money for under 1% at present. Just shows nothing has changed.


But....but... they need to make some profits isn't it... Me being cynical here... Great find. heat added. will be very useful to get a loan for my annual travel train ticket
#9
nice find to bad i got declined :(
#10
Hot from me, the only question is how easy is it to qualify for a £5k credit limit?
#11
great find. when you borrow money....you borrow money. 'credit card' 'loan' 'mortgage'...all the blinking same when it comes down to it. you've still got to manage your money to pay it back! Thx op.
#12
Nice to see that some people can see the good deal here.
1 Like #13
This is NOT the cheapest way to borrow 5k, for a car or anything else. I bought a car earlier this year on a tesco 0% credit card, have been paying the minimum repayments monthly and saving into an isa to get some interest back. I don't have to repay the 5k till march next year. 13 months at 0%, now that is a good deal. If you need longer to repay do a balance transfer to another 0% card because even with a 2-3% balance transfer fee it'll still beat the deal here.

http://www.tescofinance.com/personal/finance/finance/creditcards/clubcc/index.jsp


Edited By: 500miles on Oct 04, 2010 20:55: spelling
#14
500miles
This is NOT the cheapest way to borrow 5k, for a car or anything else. I bought a car earlier this year on a tesco 0% credit card, have been paying the minimum repayments monthly and saving into an isa to get some interest back. I don't have to repay the 5k till march next year. 13 months at 0%, now that is a good deal.


http://www.tescofinance.com/personal/finance/finance/creditcards/clubcc/index.jsp



That's great if you're buying from a dealer (and they don't charge you for using a credit card), but if you're buying second hand from a private owner, then this is a good deal.

Plus 0% credit card deals tend to have a lower credit limit than normal cards.

Edited By: adambaz on Oct 04, 2010 20:47: meh.
#15
In you opener you say compare against your dealers finance offer, in which case the tesco clubcard cc wins hands down. My dealer charged me 72 quid to use the tesco cc on a 5k car, not outrageous as I wont be paying any interest at all to borrow 5k for 13 months.
#16
i'd stay well away from any debt at the moment, because Cameron and his little games are going to put this country into a pit of dispair,
#17
In you opener you say compare against your dealers finance offer, in which case the tesco clubcard cc wins hands down. My dealer charged me 72 quid to use the tesco cc on a 5k car, not outrageous as I wont be paying any interest at all to borrow 5k for 13 months.


Fair.

After the 13 month interest free, you'll be able to balance transfer to another card for around 2%.

My comments regarding private sellers and the interest free cards attracting low credit limits both still stand though.

Plus, this is a good card for home improvements for example. I doubt many builders would accept credit cards.
1 Like #18
I can appreciate this thread actually is trying to save people money, but I guess that at least 1 person from HUKD will sign up to this that will end up in some sort of financial difficulty costing them a small fortune by the end.

I don't believe this site is a suitable forum for advertising financial products as it doesn't have the support to go behind it.
I'm sorry to vote cold, despite your best intentions.
#19
quidco?
banned#20
or if you are a homeowner with equity, then re-mortgage

2.5% interest rate at nationwide
#21
I have to say, when it comes to borrowing money, I do go out of my way to borrow as cheaply as possible. A point worth noting is that Virgin (run by MBNA) also allow you to transfer money to your current account, but they only charge a 4% fee. The amount you transfer then becomes 0% for the same period as your promotional 'purchases' offer, which in my case was 12 months. 4% for a 1 year loan is very cheap!!

I did this when I bought my last car, as it was much, much cheaper than taking out a loan, paying on a credit card, or using an overdraft, however you are obviously limited to whatever credit limit they give you. I was fortunate in that they gave me £6,500. Another thing worth noting is that Santander allows you to open a new credit card with them and balance transfer @ 0% if you have a current account with them. As far as I know they are the only people to offer a 0% balance transfer deal, so its worth opening a current account with them if you have some bigger debts to shift onto a 0% deal. They often have an offer where they give you £100 to switch current accounts and then 5% interest on balances of up to £2500 for 12 months. Although has to be said their customer service is pretty poor.

Either way, anyone looking to borrow money should think carefully and find the right deal that suits YOU. Its tough out there at the moment, so always best to do your homework before jumping into a costly credit agreement!

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