A Scotsman walks into the Bank of England in Threadneedle Street, Central London and asks for the manager. He tells the manager that he is going to Australia on business for two weeks and needs to borrow ￡5,000.
The manager tells him that the bank will need some form of security for the loan, so Hamish hands over the keys and documents of a new Ferrari parked on the street outside. He produces the Log Book; the Manager makes some phone calls and everything checks out. The manager agrees to accept the car as collateral for the loan.
The bank's General Manager and its officers all enjoy a good laugh at the rough looking Scotsman for using a ￡120,000 Ferrari as collateral against a ￡5000 loan. An employee of the bank then drives the Ferrari into the bank's underground garage and parks it there.
Two weeks later, Hamish returns, repays the ￡5,000 and the interest, which comes to ￡15.41.
The manager says, "Sir, we are very happy to have had your business and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked and found that you are a multi-millionaire. What puzzles us is, why would you bother to borrow ￡5,000?"
Hamish replies, "Where else in London can I park my car for two weeks for only ￡15.41 and expect it to be secure until I return."
Now this is true and unfortunately UK banks have caught up with it.
On various like cars and furniture etc. - I would take a bank loan ... and with minimum deposit, maximum term. Now this sounds daft and expensive ... but in fact it's not - IF ..............
Pay a few instalments and then pay of the balance in a lump sum.
Basically you had the credit at lowest monthly instalment ... until you had put together the total ... penalty payments back then for early repayment were minimal. In some cases I even got a 'discount' for early settlement.
It was cheapest money you could get !
Sadly banks have got wise to it and no benefit - in fact it can now cost you more !