philgr

There are currently some good deals around on credit cards for transfered balances, i have 2 years left to run on a loan @ 9% and there are credit cards offering 4.9% for the duration of the balance.

Is it a good idea to tx my outstanding loan balance to a Credit card, or am i missing something,

Please can anyone offer any advice

Thanks in advance

Phil G

Big Lee

Hi Phil, There are also some credit card deals around that if you transfer you balance over to them they charge 0% APR. If you pay for your loan on your existing card then just transfer your balance. When the deal runs out just look for another. I think EGG do 0% at the moment along with some other companies. I`ve done this before, it just gives you a little bit longer to pay without paying extra. Keep an eye on the adverts on the telly cos a lot of them are on.

Lee

[Edited by Big Lee - 1/27/2002 10:16:39 AM]

mook

I've recently taken out a Tesco 'Finest' Platinum card as it was offering 0% for 6 months on balance transfers. Transfered some debt into it and it has saved me a few hundred quid in interest, which is nice. I have not used it for any purchaces so it's working for me

You'd be surprised how much you can play credit cards off against each other. If you phone one up and say that another has given you a lower rate, chances are they may reduce their rate also - it's worked in the past

Could be worth a try but make sure that when special offer periods have elapsed that your not being stacked with interest. If you take the time to keep moving your money about you should be able to save a reasonable amount

P1Fanatic

The question philgr was asking (I think) is can you just call up your loan company and say you want to pay off your loan but you pay via your 0% interest credit card? Or are banks a little suss about this? I only ask because Ive just signed for the Egg Visa which is 0% until 1/7/02 and even then is only 11%apr which is better than my current credit card.

Perhaps we should make a thread that shows whose offering the latest 0% deals that way we can all keep changing cards and saving piles of interest that we could be spending on our cars? Or is there a website that does this already?

Tiggs

u can do it easily- when u take out the new card they will provide u with a balance transfer to an account from where you can draw the money normally or they will (MBNA) give u a bunch of credit card "cheques"- use this to pay of the loan.

you then have to remember to change/swap/renegotiate your rate to ensure it stays low (0-2.5% is all u should EVER pay on a credit card)

2 last things- u may find your credit limit on the cards is a lot less than your loan??? depends on how good your history is (egg, morgan stanley are pretty cool about 10-15k limits if your good risk)

and remember that most cards want at least 5% of balance repaying a month- this is likley to be more than your loan repayments so check you can afford to service the card.

Tiggs

ps- once u've paid of the card play the system- i have a seperate savings account that i dumped 0% credit card money in for the duration of the deal offered, in other words £10k-20k that grows interest for me but is not my money! just dont get tempted to spend it

philgr

Cheers guys,

I have been looking at doing this but, thought that there must be a catch,
i intend to move my loan on to a card with 0% and then pay it off as quickly as possibe,

Thanks again

mook

Tiggs > tip top idea on the savings account

Most credit cards these days, as said above, come with cheques, and they offer you the 0% on balance transfers or cheque transactions. Simply pay off the loan, or open up your saving account, with a cheque from the card. Jobs a goodun

Tiggs

mook,

its a cool idea until you decide that the TV needs updating and theres always that £25k sat there doing nothig............!

Tiggs

P1Fanatic

But as you said before - surely if you take that amount off the card to put into the savings then youve got to pay the minimum off every month - on £15k that 5% is £750 per month!!!

robby

P1fanatic - yeah £750 a month is a lot but you could take the money from the savings account, which isn't your own money really and still get a monthly intrest on the balance

rob

Carolyn T-S

You do need to be aware that with a personal loan you pay most of the interest up front, so depending upon the length of time you have had the loan it may be better keeping it where it is. Most lenders also charge you for paying off loans early. Get yourself a redemption figure and compare this to how much it would cost to keep the loan going for 2 years.

Tiggs

rob, thanks for helping P1 boy out with some simple maths

Mrs T-S, but it would be a pretty harsh loan where a redemtion to be covered by 0% borrowing was more costly than keeping it there- esp. as there are 2 years to go.

Tiggs

robby

when i've settled loans in the past i've always had a rebate (early settlement) as they cant charge interest on payments you haven't made (future payments)

rob

Tiggs

bit more complicated tahn that rob but not as bad as being worse of than if you kept it going- unless you use loan sharks!

Tiggs

Mrs T-S, hope those speced up WRX's arent funded by sharks

Carolyn T-S

Tiggs - no loan sharks been near our scoobs - all finance free thanks very much

Oh - I forgot to mention the re-mortgage LOL

MattN

if the loan is less than 25k they can only charge a max of 3 months interest under the credit agreement act of 1974 (or 73 I can't remember).

You won't get a rebate. The interest is based on the amount you owe, so in the early stages you pay of more interst than capital. I can't see how you would get a rabate unless you've been making a bigger payment than your supposed to.