View Full Version : Wohooo! I'm in the money! (kind of!)
Well, my parents spoke to me yesterday about recent events that have been getting them a little worked up, but all resolved now.
Looks like they've settled the final payment on their mortgage through selling a large bulk of my dad's company shares. They're well happy and hopefully my ol' man can relax a bit now as his work is pretty damn hectic and he not too long ago had a heart attack.
Anyways, looks like they've also agreed to give each of us, the children that is, £10,000 for our own spending purposes! My sisters going travelling, my brother's going to buy a newer Hilux, and I've got one of two choices but not sure which to do. :)
Do I a) use the money to pay off my £9,500 outstanding Direct Line loan that I got for the car, or b) keep it in an ISA as a 'partial' house deposit and keep making my monthly payments on my loan for the next 2 years?
Not sure what the 'best' deal is.
Financial advice needed please!
Thanks,
Greg
Pay off your loan and enjoy the extra cash you have spare each month mate :)
kieren1234
10-08-07, 11:26
Pay off your loan and enjoy the extra cash you have spare each month mate :)
Thats exactly what i would do too and rest knowing that you have cleared your debt. Ask your dad if i can have some please lol
id bank it mate and keep paying ya loan then...when ya loans paid off you got the 10k and the cars yours:)mabye treat yourself to a holiday or a few lap dances till then:)
I would put the money away in a savings account, and continue paying off the loan as you are.
I did this when I sold the shares I had in the company I used to work for. I asked myself if I paid off the loan I had, how likely would it be that I would save up that sort of money in the next couple of years for a deposit on a house. And the answer was not very likely at all!!
Well, my parents spoke to me yesterday about recent events that have been getting them a little worked up, but all resolved now.
Looks like they've settled the final payment on their mortgage through selling a large bulk of my dad's company shares. They're well happy and hopefully my ol' man can relax a bit now as his work is pretty damn hectic and he not too long ago had a heart attack.
Anyways, looks like they've also agreed to give each of us, the children that is, £10,000 for our own spending purposes! My sisters going travelling, my brother's going to buy a newer Hilux, and I've got one of two choices but not sure which to do. :)
Do I a) use the money to pay off my £9,500 outstanding Direct Line loan that I got for the car, or b) keep it in an ISA as a 'partial' house deposit and keep making my monthly payments on my loan for the next 2 years?
Not sure what the 'best' deal is.
Financial advice needed please!
Thanks,
Greg
I say C - give me the 10k so I can Invest it in my car ;)
depands how much of the 9.5K is intrest calculated over the term and if there are any early repayment penalties!
May be worth getting a settlement agrement from the bank - you may find they wont do it without charging you!!
I sold the car to pay off my £8k credit card debt Mr Keef.
Hmm, if I did pay off my loan I probably wouldn't save a penny and at least whilst I have the £10k in an ISA i'll be earning good interest.
I thought about buying myself a good newer car too, something like a 325 E46 too. I'll have to have a good think about what the best option is.
Cheers all.
PS: No chance Heckler! You've done enough to your car already!
Sounds like a scam to me mate, be very careful :d
If it isn't, bank it :)
The maths is pretty simple. You can't earn more in interest than you pay in loan interest - otherwise we'd all take out huge loans and invest them. So pay off your loan and then start saving in an ISA monthly (using the money you were paying off your loan with).
The maths is pretty simple. You can't earn more in interest than you pay in loan interest - otherwise we'd all take out huge loans and invest them. So pay off your loan and then start saving in an ISA monthly (using the money you were paying off your loan with).
A very sensible response. Thanks Dave. Although surely ISAs and the like offer slightly higher interest rates over other savings accounts, and most likely over rates of interest on loans, surely?
I'd pay off the loan, then set up a standing order to put what would have been your loan repayments into an ISA each month. After two years you should be quids in over the "ISA it now and pay the loan over 2 years" route.
You'll be no worse or better off with spending money each month, but you wouldn't have the loan hanging over you.
Edit: Dave beat me to it! And a loan will have a higher repayment rate than a ISA will earn interest at :)
Put it in a bond or something similar, 3/5 year investment. You'll thank yourself when it matures :)
A very sensible response. Thanks Dave. Although surely ISAs and the like offer slightly higher interest rates over other savings accounts, and most likely over rates of interest on loans, surely?
The only difference with ISAs is that the interest is not taxed - so the interest you receive is greater, but the banks are not generally paying ant higher interest than they would on a "normal" high rate savings account.
I think any bank that had a system where you paid them interest at a lower rate than they paid you interest would not survive very long.
DaveK is correct. That's the thing to do. Just be really strict about putting x amount away each month. Set up a SO or something so you can't forget!
mikeyb10supra
10-08-07, 12:52
If you can get on the property ladder mate do it.....dont even consider spunking it on bad investments
You can't put £10k into an ISA. There are set limits to how much can be put in every six months, I think it's around £2,500 every six months. You could always put some in the girlfriend/wife's ISA though.
If you pay off the loan early, will that lessen the amount of interest you have to pay? If so then the interest saved would probably be higher than interest gained in a regular savings account, and possibly an ISA.
I definitely wouldn't advise spending the money on unnecessaries while you have outstanding debts.
The maths is pretty simple. You can't earn more in interest than you pay in loan interest
You can if you're a student.
Greg - check the early repayment terms of the loan. This may make your mind up for you!
You can't put £10k into an ISA. There are set limits to how much can be put in every six months, I think it's around £2,500 every six months. You could always put some in the girlfriend/wife's ISA though.
If you pay off the loan early, will that lessen the amount of interest you have to pay? If so then the interest saved would probably be higher than interest gained in a regular savings account, and possibly an ISA.
I definitely wouldn't advise spending the money on unnecessaries while you have outstanding debts.
The limit is not 6 months.
For a mini cash ISA it's £3K per year. You can then also invest £4K per year in a stocks and shares ISA, although I wouldn't really advise that if this is your total capital anyway.
Sorry, it's actually £3k per year, not six months.
You could only put £3k into an ISA each year. The numbers might change each year as the Chancellor does his budgets.
The limit is not 6 months.
For a mini cash ISA it's £3K per year. You can then also invest £4K per year in a stocks and shares ISA, although I wouldn't really advise that if this is your total capital anyway.
Yeah I just found that out after a quick google :)
So a 'stocks and shares ISA' is just tax-free investment in private companies? Same risk as any other shares investment, just tax-free?
Yeah I just found that out after a quick google :)
So a 'stocks and shares ISA' is just tax-free investment in private companies? Same risk as any other shares investment, just tax-free?
Yep. Depending on how you do it, you can still have some control over risk. So you can tell your bank / financial advisor / whatever that you want investments in low risk / high risk etc. so they can still be reasonably safe (although with likely lower return). You just don't pay interest on the money you make.
You can if you're a student.
Greg - check the early repayment terms of the loan. This may make your mind up for you!
I'll check that when I get hone today mate for sure. Thanks ;)
Greg
Yep. Depending on how you do it, you can still have some control over risk. So you can tell your bank / financial advisor / whatever that you want investments in low risk / high risk etc. so they can still be reasonably safe (although with likely lower return). You just don't pay interest on the money you make.
Even low risk can make a loss though, if you want to invest you might want to tell your investment advisor that you want no risk, you don't want to UNDER ANY CIRCUMSTANCES have an investment that is worth less than it currently is. AND GET IT IN WRITING. This way if it does lose value you can claim under mis-selling regulations. The ROI might not be as high as other investments but the risk should be lower.
Mike
You could pop the 10 k away in an investment bond. you would get around 5.7% interest on that but you need to lock it away for a year.
Alternatively pay off your debt but set up a monthly saver and keep putting the same amount of money from your loan repayments in to that. They normally pay up to 8% on a maximum monthly investment of £250.
I would personally go with b as if you invested 250 a month you would have more than 10k in a couple of years :)
You haven't lost anything as you are paying that money anyway for your loan.
Even low risk can make a loss though, if you want to invest you might want to tell your investment advisor that you want no risk, you don't want to UNDER ANY CIRCUMSTANCES have an investment that is worth less than it currently is. AND GET IT IN WRITING. This way if it does lose value you can claim under mis-selling regulations. The ROI might not be as high as other investments but the risk should be lower.
Mike
True - but if you want no risk / must get back at least what I invest - then you simply can't invest in stocks and shares. That's what savings accounts are for.
Good idea Col.
I think I'm going to pay off the loan straight away and perhaps look into a clever investment.
I may buy my OLD SUPRA BACK! :)
True - but if you want no risk / must get back at least what I invest - then you simply can't invest in stocks and shares. That's what savings accounts are for.
True - or investment bonds, I'm sure there are other avenues for investments, but I wouldn't know them hence the financial advisor. Plus there is a possiblilty you'll get a muppet advisor who ignores your attitude to risk and invests in stock and shares giving you a potentially high ROI but with the added security blanket of the mis-selling legislation ;)
Mike
True - or investment bonds, I'm sure there are other avenues for investments, but I wouldn't know them hence the financial advisor. Plus there is a possiblilty you'll get a muppet advisor who ignores your attitude to risk and invests in stock and shares giving you a potentially high ROI but with the added security blanket of the mis-selling legislation ;)
Mike
There is also the complication of charges. Some charge you much more than others - some have "entry" charges, but lower monthly / annual charges, some have similar exit charges and some just charge slightly higher annual charges. All very complicated.
Hehe its a great feeling having that kinda cash , spend it on sweets i say.
Had my first offer of £130K for compensation just over a week ago but was advised to turn it down and hold out for £200k:)
Thats a whole lots of sweets ;)
Bring on the lexus supra :):)
Hehe its a great feeling having that kinda cash , spend it on sweets i say.
Had my first offer of £130K for compensation just over a week ago but was advised to turn it down and hold out for £200k:)
Thats a whole lots of sweets ;)
Bring on the lexus supra :):)
Jesus! For what mate? Have you had all of your kidneys and lungs removed against your will or something!
That's a crazy amount of money. :)
I may buy my OLD SUPRA BACK! :)
I wouldn't buy your old one, but there are plenty of nice ones about for 10k
Life is too short to put money in a bank.
Splash out on another Supra mate... you know you want to ;)
Seriously, pay off your debt and start saving for another Supe.
I wouldn't buy your old one, but there are plenty of nice ones about for 10k
Life is too short to put money in a bank.
LOL. That was a joke Rich!!! :) Indeed, I'd be in the market for a nice Manual if poss, but I think I may defect now............
Splash out on another Supra mate... you know you want to ;)
Seriously, pay off your debt and start saving for another Supe.
Yep Steve, going to pay off my debt and then get my next 'dream' car. An EVO VI. :)
Jesus! For what mate? Have you had all of your kidneys and lungs removed against your will or something!
That's a crazy amount of money. :)
something like that hehe
Hi mate,
Id recommend putting the money into Premium Bonds from NS&I, ive had 8k in their since december 06 and so far ive won £450:cool:. your not guaranteed to win but so far its working out for me, prizes range from 50-1million. not a bad return when you consider the interest you would make from an ISA.
Cheers
Chris
chris burford
11-08-07, 19:28
Well, my parents spoke to me yesterday about recent events that have been getting them a little worked up, but all resolved now.
Looks like they've settled the final payment on their mortgage through selling a large bulk of my dad's company shares. They're well happy and hopefully my ol' man can relax a bit now as his work is pretty damn hectic and he not too long ago had a heart attack.
Anyways, looks like they've also agreed to give each of us, the children that is, £10,000 for our own spending purposes! My sisters going travelling, my brother's going to buy a newer Hilux, and I've got one of two choices but not sure which to do. :)
Do I a) use the money to pay off my £9,500 outstanding Direct Line loan that I got for the car, or b) keep it in an ISA as a 'partial' house deposit and keep making my monthly payments on my loan for the next 2 years?
Not sure what the 'best' deal is.
Financial advice needed please!
Thanks,
Greg
Hi
If it was me i would pay off the loan so your not paying interest.
Then start saving the amount the loan was costing you each month in a savings account because you can obviously live without that money, of which you will then receive interest on it thus making your money work for you. Why pay the bank when the bank could be paying you plus when you come to getting a mortgage a lender will possibly loan more because you wont have as much outstanding debt. Hope that makes sense im sure there is somwbody on here that could put that into better england if you know what i mean.
Cheers mate
Chris
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