What is the best way to borrow money?

[tigwig]

I want to borrow �5000 for a holiday and don't know whether to add it onto our mortgage which is already in 3 parts due to first increasing it because of moving house and getting a new deal and secondly we have already borrowed �10000 on it a few years ago to do the house up. Or shall I just go to a loan company and borrow the money over 15-20 years?

[Ethel]

Borrowing from a loan company for such a long time is a no no. The interest will be horrendous - if you can get a �5k loan over 15 years.

And adding it to your mortgage isn't wise - interest rates are set to rise still more.

Can you afford to pay a �5k loan over 3 or 5 years? That's the only way I'd do it.

[Reverandfunk]

Would you honestly want to spend 15-20 years paying for a holiday???

Why is it 5k??

[spaced]

Can you borrow from a family member who would be happy for you to pay it back monthly, without interest?

My dad has always said if i need to borrow money he would lend it to me to avoid paying OTT interest back to the banks

[Dassie]

If you must borrow money for a holiday then the starting point is to compare interest rates. What rate do you pay on your mortgage compared to a loan FROM A BANK ( not a loan company ) compared to say an overdraft facility, but the latter is repayable on demand.

[tigwig]

thanks for your answers we have decided to borrow the money on our mortgage over 15 years which I know is going to cost us extra in the long run but we feel it is worth it for not having to worry about how we are going to pay for our already booked holiday. The reason we need 5k is to go to florida cos that is just about what it is costing us and after the worst year we have ever had, we think we desreve it!

[factor-fiction]

If you borrow �5000 @7% pa as interest only mortgage the holiday will cost you �12000 eventually. If it's a repayment mortgage over 20 years it will cost around �9000. So future holidays seem unlikely.

[PrinceRainie]

Why borrow �5k over 15 years for a holiday........no offence..but you are totally mad......
what happens next year when you want to go on holiday...borrow another �5k...and then the year after...same again...etc..etc...etc...
If you have told the bank or mortgage advisor that this is what you intend on spending the money on then they are adding to the already criticised irresponsible lending that bank and building socieities are already guilty for.
unless it is a holiday of a life time or a holiday for a dying relative then dont do it as you will end up paying an awful lot of money back for the pleasure of just a couple of weeks!!!

[kujawski]

what you need iz a dodgy loan shark at approx 60% apr,
hell sort you out!

[rahim2206]

My advice being put in a similar situation and being a mortgage broker, i took a advance on my mortgage at a rate of 6.5% variable no tie in no arrangement fee over the term of my mortgage (30 years). the monthly cost for 15k is �95 (home imp ) doing the same over a shorter period would cost me �201 over 10 years.
although the advance will cost me over ther term more on interest - if you are responible and for 5K its about �31 over pay , pay it off early maybe 5 years you will pay alot less interest.
Also remenber by the time they come back off holiday the house may have gone up in value anyway. Use your asset wisely - cos if you dont ,you get old, go into an old peoples home and the government take it away anyway!

[tigwig]

PrinceRainie thanks for your positive answer. I am actually not totally mad this is the holiday of a lifetime and in my case, the dying relative is already dead. The reason why I am prepared to borrow this money is because my family has just had the worst year ever, my mum in law died of cancer which could have been prevented (thats another story) and ths is the holiday we were all supposed to be going on this year until she was diagnosed then obviously it was cancelled. Sometimes you have to think sod it yes it is debt but controlled debt, I don't think �5k is the end of the world. So we are going on the holiday early next year without my mum in law and this is desperately needed so we all have at least one thing to look forward to.

[bednobs]

if you can afford to pay it off sooner, you will end up paying less. It is not up to anyone else to tell you how to spend your money but you will seriously be paying for 15 years for 2 weeks, which might or might not be "the holiday of a lifetime"

what if you go and there are hurricanes meaning you have to stay indoors?, or someone in your party (or you) gets hoiday tummy fr two weeks? or slips over and breaks their leg and spends a week of that time in the hospital; how will it feel then in 14 years time when you are STILL paying for it and it turned out not to be what you expected?

if you need something to look forward to, surely as you know its the people that make it, not the place. Two weeks in a cottage in this country somewhere could cost you 1/10th of the price and could be saved up for rather than saddling yourself with this massive debt!
i know its none of my business at all so feel free to disregard my advice

[PrinceRainie]

in which case Tigwig...apologise......have a bloody good time..sounds like you deserve it..