Annie Shaw: Could a loan save you money?

Annie Shaw / 26 January 2017 ( 07 November 2017 )

There are some circumstances in which it’s worth considering a loan, even in later life.

Timetabling payments

Having access to a sum of money and a fixed repayment schedule can offer reassurance compared with trying to juggle an array of different credit agreements. 

No more remembering which bill to pay when, and knowing the rate of interest you are paying each month is a relief. 

How to choose the best loan

Beware of loans with attractive headline rates: often you end up being offered a different – higher – one.

Replacing white goods

If your washing machine or tumble dryer keeps breaking down, taking out a loan to replace it with a more reliable, more energy-efficient model could save you money in the long run.

Home improvements

The same applies to inefficient or defective heating, poor insulation or exterior damage such as missing roof slates, where a loan can help you pay for repairs. 

The cost of the loan will at least in part be offset by lower household bills or an even more costly structural repair if damage such as rotting timbers sets in.

Installing new door locks or an alarm system could reduce your insurance bill – and make you feel more secure, especially if you live alone.

Seven home improvements to add value

Preparing your home for sale

You may not want to go for a complete makeover before you put your home on the market, but small improvements, such as replacing broken tiles and fittings, cleaning carpets, painting the front door or paying for the garden to be tidied, will make your house more attractive. 

It will almost certainly achieve a higher sale price than if it looks neglected.

How to sell an unsellable property

Medical treatment

While we all love the NHS, there are waiting lists for some treatments and surgery often depends on the severity of the condition. 

For minor ops, such as cataract surgery, it may be possible for people without medical insurance to pay for treatment privately.

A simple operation doesn’t need to be life-saving to be life-enhancing – and could save you money in the long run if, for instance, you could drive again instead of having to take taxis.

Debt consolidation

You should take care when bundling debts into one bigger loan, particularly if you prefer to make irregular repayments to fit in with income streams. 

Beware of companies offering secured loans against your property, for example. A missed repayment could prove costly. You should always read their small print very carefully.

Taking out a personal loan, however, to clear stubborn and more expensive borrowing, such as credit-card debt, can make a lot of sense. But be sure to do your sums carefully.

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What to look for from a loan

Are loans offered up to a good age, at least up to 75? Is the interest rate fixed for the whole term of the loan, and not subject to increase?

Annie Shaw

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The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.