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We applied for a personal loan of a value that we know we have to use over a few months.

Can I put it in my savings account or an ISA account until we use it all? I live in the UK.

Thanks.

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  • I don't live in the UK but typically when you get a personal loan, the institution will deposit the money in your checking or savings account or cut a check to the entity you want. Jan 25 '14 at 2:55
  • Depending on the size of the loan proceeds, you might not be able to put the money into an ISA. Isn't there a limit to the per-year amount that can be put into an ISA? Jan 25 '14 at 3:55
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Yes, you can certainly keep it in a savings account until you spend it. You'll get much less interest than you will be paying on the loan, but it will be better than nothing.

However, you may want to ask if you can use the loan flexibly instead - i.e. only "draw down" the money you need when you need it, and not start paying interest until that happens. That would save you a lot more money.

Note that the ISA limit is currently £5,760 and the limit is on total deposits so you won't be able to reuse the amount later in the tax year. Since that ends on April 5th that probably won't be an issue for you.

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