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Not sure I agree with the maths...can someone help ?
According to my maths this technique is nearer to a loan equivalent of more than 6.4% not 2.9% as stated. For example on a 10,000 loan the balance transfer cost is £290. However as this is on the full ammount, rather than a reducing ammount (as a loan would be) then a loan of 5.3% would yield the same cost of £290 over the 12 months. Additionally, most cards operate a negative payment heirarchy and charge interest on the transfer fee raising the cost by another typically £46 over the year (16% typical APR on £290). Also as this £290 is paid up front, it looses interest that it could attract by being left in a current or savings account, pushing the total cost to nearly £350, which is approximately equivalent to a loan of 6.4% (calculated from the tool on http://www.moneymadeclear.fsa.gov.uk...oan_calculator) Or am I missing something?
Sorry to question your maths Martin! but I've just re-read the article and did not realise that you had found cards with 2 years or more "life of balance" transfer deals. Now it makes sense to me.
I'm a bit paranoid about this point because I've seen other websites stating that a "3% balance transer fee is less than half than any loan APR" which unfortunately isn't true, the equivalent APR is about double the transfer fee for a 12 month BT deal, 3X for a 6 month etc. and I know a few people getting caught out by this.
Hello All,
I wondered if i could reduce my loan in this way...
I have a loan with Halifax bank with £2,000 remaining and £2,058 as a settlement figure. Its circa £60 a month for the next 4years (£2,520 in total if i keep paying).
Halifax want to offer me an interest free balance transfer credit card for 13 months - but obviously if i transfer this balance of £2k, and clear it, it wont be classed as a balance transfer as it is a loan with them.
I have applied, and been accepted for, an egg money card today with enough credit to cover the loan.
Can i pay the loan off in full to Halifax bank with my Egg Money card, then transfer the balance to my NEW halifax credit card and acheive the 13 months interest free? I have calculated and i can pay this off in full by this date.
Great article, has made a future loan decision easier.
Only problem I see is that what if you need £5000, and the card you chose gives you a credit limit of £4000?
Does the credit limit not effect balance transfers?
The Following 2 Users Say Thank You to Reppyboyo For This Useful Post:Show me >>
Hello All,
I wondered if i could reduce my loan in this way...
Can i pay the loan off in full to Halifax bank with my Egg Money card, then transfer the balance to my NEW halifax credit card and acheive the 13 months interest free? I have calculated and i can pay this off in full by this date.
As far as I understand it : YES you can, but the order in which you need to do things is a little bit different to what you state
1) Status: Current loan = £2000, I assume that the extra £58 that you quote is some early redemption penalty?
2) Use your Halifax credit card to do a balance transfer of £2058 to Egg money. This will cost you 3% of £2058 = £61.74.
3) Status: You will now be in credit on Egg by £2058 and in debt on your Halifax credit card by £2119.74. As you are never in debt on the egg card, then this credit limit does not matter.
4) Now transfer the credit on your Egg card to pay off your loan.
5) Set up a direct debit on the Halifax! Lest we forget
Note that as the Halifax card operates a negative payment heirarchy you will be paying interest on the £61.74 BT fee at ~16% so the TOTAL cost after 12 months will be £129.62 (£58 redemption + 61.74 BT cost + 16% APR of this £61.74)
It's difficult to know from the numbers that you give how much of the existing repayment is interest and how much is capital repayment. But if I assume £10 is interest per month? then the cost of keeping the loan for another 12 months is £120. I have to admit that I would be tempted to stash the extra cash that you state that can afford for making overpayments into a high interest account, then use this to pay off the loan balance in 12 months, this interest should cover a significant part of the early redemption fee so the total costs would be similar, but this way you're not juggling credit cards, and if your situation changes over the next 12 months you are not committed to making the overpayments. There's very little difference (£25?) in cost either way.
Firstly if you do not intend to pay off your Credit Card bill at the end of each month, then you should look at the Annual Interest Rate (APR), this rate is typically between 13-17% at the moment, and you should be looking for a card that offers as low an interest rate as possible.
i am looking to borrow £7000 over 5 years, i have looked into a loan and my paymnts would be approx £140 a month and i would end up paying just over £1000 in interest.
My question is how much would my minimum monthly payments be and with paying fees etc, will i be saving that much by using the cards?
According to my maths this technique is nearer to a loan equivalent of more than 6.4% not 2.9% as stated. For example on a 10,000 loan the balance transfer cost is £290. However as this is on the full ammount, rather than a reducing ammount (as a loan would be) then a loan of 5.3% would yield the same cost of £290 over the 12 months. Additionally, most cards operate a negative payment heirarchy and charge interest on the transfer fee raising the cost by another typically £46 over the year (16% typical APR on £290). Also as this £290 is paid up front, it looses interest that it could attract by being left in a current or savings account, pushing the total cost to nearly £350, which is approximately equivalent to a loan of 6.4% (calculated from the tool on http://www.moneymadeclear.fsa.gov.uk...oan_calculator) Or am I missing something?
I want to repay my egg loan since they have cancelled my egg card (already BT'd that). I therefore don't want to use Egg Money. Is there another way of paying off a loan with a 0% BT from a credit card? (Loan is 8700 to July 2011).
Following the procedure described here for getting 0% loans via a card and Egg Card works up to a point... but today I hit a minor problem. Apparently you can only make an free balance transfer from your Egg Money card to your current account if the amount is less than 1000. You can however do this every day, so if you are willing to go through the nuisance of identifying yourself to their telephone robot over and over again you can still transfer larger amounts! When I pointed this out to the Egg person who took my call, he went and consulted his supervisor, and "as a special favour" transferred the full amount I wanted (5000) free anyway. So politeness and perseverance pay off....
Just been offered by my egg credit card a balance of £5,500 interest free for 15 months. then a further 5 months interest free on the aniversary.
I am thinking of re doing my bathroom and need around 2500 to do this. So do I balance transfer the 2500 from my egg credit card. Then set up a standing order to one of my accounts ready to pay it off after 15 months (which I can afford to do). This I think will be a very low interst rate loan for 15 months. Or because i'm only thinking of doing the bathroom work (and these things take time) is it better to just take out a 2 year loan?
Hi everyone,
This is my first 'post' so be gentle with me!
I recently decided it was time to get a new car as I have had mine around 2 1/2 years now. I took out a loan to purchase my current car through Virgin at 6.9%, which I thought was a great rate considering I was only just 19 at the time and had no other big dealings with credit.
However, when applying for loans now, I get through to the application stage and the lowest APR's I am being offered are around the 13-14% mark. I thought this was way too high and therefore investigated further through Experian. Apparently my credit score is showing as 'fair' due to late payments made to 'Additions Direct'. I can only remember one of these late payments as I completely forgot to pay, it was not that I couldn't pay. I am in the process of 'sorting this out' with Additions seeing as though it has had such a big effect on my credit rating. Also would like to know my Account history and try to rectify the so called other late payments.
Seeing as though scenarios such as this stay on the credit report for so long, will I find it hard to get a good APR rate loan for the near future?
I am looking to borrow between £4 and 5k, so if anyone has any advice on how best I can do this, I would grately appreciate it.
I'm new to this just wanted ask what's the best way about going about getting a small loan for a PC say about £400 quid do I go to loan company or do buy now pay in 6 months any decent advice would be very fab as I'm confused about the whole thing mind, you I'm only on the thinking about it stage at the mo.
Thanks
A loan for £400? Why? You haven't got a credit or debit card? There are many credit card companies with all sorts of 0% deals. Spend some time online. Start with www.moneysupermarket.com.
The student loan consolidation rate offered by federal student loans is much lower than private student loans, and although most private student loans are not very cheap, it is usually replaced with one or more college consolidations. The benefit is that it reduces the single monthly payment....read more here
We have read through Martins instructions to get a laon on a credit card. However we are confused as he recommends borrowing from either barclays or itunes cards which are best balance transfer cards at low life of balance rates. Surely if we borrow from these cards we will be charged higher rates e.g 15.9% as we are not tranfering from one card to them which would be a balance transfer?????
I am looking to take out a loan to buy a piece of Land at auction. The land does not have planning permission and so I cannot get a conventional mortgage.
I need to borrow the money before the auction however if I don't get the land I would be looking to repay the loan almost immediately. Can anyone tell me how to calculate the Early Repayment fee? I have been quoted 2 months interest. What would this equate to on a £9000 loan over 7 years @ 7.7% interest rate?
I also intend to borrow approx £3000 from my barclaycard (£3600 is the credit limit on this card) using the BT - Egg money system.
Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps. Take care over copyright. Use excerpts and links rather than copying long text. This site asserts copyright on all comments posted on the board.
Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps.
Cheap Credit Card Loans Discussion Area
Not sure I agree with the maths...can someone help ?
please help?
Early Repayment fees
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