Paying off finance – CC or loan?

[TimmyWimmyWoo]

Hello all – I've not poked my head in this corner of PH before but it seems there's some knowledgable folks about who might be able to give me some advice.

Basically I've got around £4500 outstanding finance on my bike, which I want to sell. Before I sell it I need to clear the finance – I presume my best bet here is either a Credit Card or personal loan. I'd then use the money I get from the sale to completely pay off the loan or credit card.

So I'm looking at borrowing/credit carding the £4500 for however long it takes to sell the bike (probably about 2 months tops, it's a REALLY NICE bike, and you should buy it!) My question is this: which will be better for short term borrowing, the CC or the loan? I'm guessing any personal loan will be costly if I'm going to settle that early (if it's even possible?)

So if a CC is the best route, which would you recommend? I'll only be using it for this one 'purchase', so would I be best getting a 0% for 9 months one? I've had a bog-standard HSBC Mastercard for 5 years, several loans and I think my credit rating is pretty good – I'm always in debt but have never, ever missed a payment. Lifelong student, or something like that ¬_¬

[RichB]

Have you thought about an agreed overdraft?

[TimmyWimmyWoo]

Thanks for the quick reply! It had crossed my mind, but I'd still be paying interest on it, even if I've only got money in the OD for two months or so. Is that right?

[RichB]

Yes but only for the period you have the money whereas some loans may have a penalty if you pay them off early and don't even think about a credit card... I'd start with a quick call to your bank tell them what you're intending to do and ask the cheapest way to achieve it. I needed £20k for a short period once and my manager just said use an overdraft.

[TimmyWimmyWoo]

OK, thanks for your advice – I'll go and chat to the bank soon!

[amir_j]

other option is to look for a personal loan with a no early payment penalties, that way if things go wrong you have a reaosnable rate with reasonable sums and if all goes well you pay it off with little interest paid.

[Tuscanless Ali]

Maybe have a word with your local Triumph dealer and see if they will do a SOR on your bike, then they can pay the finance off after the sale.

[mattley]

TimmyWimmyWoo said:

Before I sell it I need to clear the finance

Not necessarily, as long as you're open with the buyer they might be quite happy to pay the finance company direct, it's not that unusual.

[B16JUS]

mattley said:

TimmyWimmyWoo said:

Before I sell it I need to clear the finance

Not necessarily, as long as you're open with the buyer they might be quite happy to pay the finance company direct, it's not that unusual.

as above why bother, just be open and tell the buyer the situation its far easier for them too as if you sell for 5000 and owe 4500 they can just bring 500 with them and pay the remainder over the phone and then ride off with the new bike.

[P-Jay]

Firstly -

You need to find out if your bike finance is secured on the bike. Most finance companies won't do bikes on HP/Leases. Dealer finance tends to be on a personal loan basis like consumer purchases like Sofa's, TV's & mountain bikes etc.

Secondly it might be easier to get a settlement figure in writting and have the buyer settle that directly and pass you the equity, normal safeguards about payment should be followed.

I.E. Ask the buyer to settle it over the phone on the day of collection, and then ask the finance company to confirm it's settled - only takes a min and your buyer can be assured it's 'clear'.

Better than paying fees or going through the drama of applying for a credit card for the job.

[Defcon5]

Depending on if you have any neg eq, it could be more cost effective to hand the bike back to the finance company if you can

[B16JUS]

P-Jay said:

Firstly -

You need to find out if your bike finance is secured on the bike. Most finance companies won't do bikes on HP/Leases. Dealer finance tends to be on a personal loan basis like consumer purchases like Sofa's, TV's & mountain bikes etc.

thats not true, lloyds ( black horse ) is one of the biggest bike finance companies and works just like a car finance.

[bob1179]

B16JUS said:

P-Jay said:

Firstly -

You need to find out if your bike finance is secured on the bike. Most finance companies won't do bikes on HP/Leases. Dealer finance tends to be on a personal loan basis like consumer purchases like Sofa's, TV's & mountain bikes etc.

thats not true, lloyds ( black horse ) is one of the biggest bike finance companies and works just like a car finance.

Just to add, Black Horse also allow early settlement without any penalties.

[TimmyWimmyWoo]

Thanks for all the advice guys – the finance is with Close Motor Finance, they had a better rate than Black Horse at the time of wandering wide eyed into the Triumph dealership and spunking lots of money on a shiny new toy...

[B16JUS]

TimmyWimmyWoo said:

Thanks for all the advice guys – the finance is with Close Motor Finance, they had a better rate than Black Horse at the time of wandering wide eyed into the Triumph dealership and spunking lots of money on a shiny new toy...

sounds like its going to be secured on the bike, prob worst case is a months interest penalty and rebate of the interest ring them for a settlement figure first so you know where you stand

J