Best way to borrow £7k.

[PeepsAndSheeps]

We need some repairs done to the house totalling £7k. I would really like a loan or credit card that I can make overpayments on easily and clear quickly, if possible, as I am hoping to change jobs in about a year and would like the debt paid off before then.

I don't want to defer the work by a year and save because we were quoted the £7k price back in february and we secured it with a deposit, but we were advised that prices would rise by 20% in this new tax year. So if I put the work off it will cost me £8400.

I think a 0% credit card would be more flexible than a loan, and we do have very good credit history, I'm just not sure if £7k is too much for a credit card? I've never had more than £1k on one.

I think it does totally depend on your circumstances, income, existing debt etc. But unless you're on quite low pay I don't think £7k is that much to be offered. They might try to persuade you to borrow more!

I'd agree with you that a 0% credit card makes sense for what you're suggesting, just so long as you can repay it during the 0% period.

Is there a way of finding out my credit limit without applying to lots of different credit cards and having all of those credit checks? I can see some 0% interest credit cards online but none of them will tell me what the limit is on them without me applying.

You can check eligibility on money saving expert without it affecting credit score

The credit limit is set for each person. 7k is really nothing if you have good credit and a relatively decent income in terms of a credit limit amount.

The key with a 0% card is if you can pay it off before the 0% term ends. It’s often something like 6 or 12 months. If you don’t, the interest rate skyrockets. That is what they are hoping for, that you charge a large amount and don’t manage to pay it off in time.

Credit union loans are very flexible in terms of overpaying and generally have low interest rates

You'll probably be surprised how much they'll give you on a credit card. I recently took out an AMEX card (just for the cashback through Top Cashback) and they gave me a £10K limit! I have a decent credit rating but not amazing and only earn £26K. I got them to drop it to £3K as I felt it was too high but they were obviously willing to go a lot higher

Does the person doing the work take credit cards as payment? If not, you'd have to get a 0% cash advance credit card so you could then withdraw the money to your bank. There's likely to be a fee for that, and a maximum % of the credit limit you can withdraw.

All loans accept over-payments, so you'll have to balance the total cost of credit.

I would go for the 0% credit card. Make sure you set up a direct debit to pay at least minimum each month in case you forget to make a payment. If you miss a single payment you will lose the 0% and interest rates will be high.

What's wrong with an unsecured loan?

I’ve just done exactly this and gone for an interest free credit card it is over 22 months so I’ll pay it off before that period ends.

@titchy

What's wrong with an unsecured loan?

Higher interest (than zero) and a fixed repayment schedule.

Sign up for MSE credit club and you can check best options for credit cards and loans, and it will show your eligibility chances.
Good point from pp about checking your trades accept card payment!
If you have to go down the loan route, personally I've found Zopa loans to be really good - you can make extra repayments settle early with no charges. All done via website

Thank you. Very good tips.