is my friend bonkers about a loan?

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She wants to borrow £5,000 to pay off a £2,000 credit card and buy a car

She wants to pay part of the CC off (about £1500) and then put the other £3,500 in a savings account - so that maybe in six months time with that money and a bit of saving, she can buy a new car?

I have said, it's crazy, as the loan and CC payments remaining, would cost her more than the savings she could ever accrue.

I have suggested that she pays off the CC and buys a car now. Or, because the £5k has lower repayments than borrowing £2k - pay off the CC and then use the remaining to bulk pay a lot of the initial loan (and incur early repayment charges)

Thoughts?

I think it's her decision and she can do what she wants but yes, I think that it doesn't sound the most sensible way of doing things, not by a long way. But what can you do? You can't make someone do what you think is right.

At the very least, you'd think she'd completely clear the credit card.

she would be better off transferring the money to a 0% balance interest card, and paying that off. £2000 is a big credit card bill.

Only if her old car was on its last legs ( ours had £1000 worth of work needing, it was worth less than that) should she consider a loan. She would be better saving towards it and wait a year or two.