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  • FIRST POST
    • fiisch
    • By fiisch 5th Oct 17, 10:58 PM
    • 208Posts
    • 89Thanks
    fiisch
    Can you Pay a Loan off with a Credit Card?
    • #1
    • 5th Oct 17, 10:58 PM
    Can you Pay a Loan off with a Credit Card? 5th Oct 17 at 10:58 PM
    Before anyone lambasts me(!), I'm only thinking of doing this as I may have a credit on my credit card!

    Backstory
    We have a £10,000 Ikano Loan (3.2%) which we took out in May 2016. Between January and June this year I was contracting, so we managed to pay a sizeable chunk off the loan, and the remaining balance currently stands at around £2,800. The loan was used to pay off a mortgage in my parent's name against their property, that we had been paying that originally helped us to get on the property ladder.

    We have a holiday booked (hotels only) at a cost of £1,750, with flights to come via staff concessions. My wife has just returned from maternity leave to work part-time, but is already considering cutting her hours. I'm a little concerned that if she does this, we will only just meet our monthly obligations (below for reference with revised figures based on reduced hours), so am considering cancelling the holiday to pay down the loan (otherwise we'd have paid the loan off under our steam by Christmas).

    If I cancel the holiday and get a £1750 credit on the credit card (Amex), will I be able to pay this straight off the Ikano Loan or will I get charged by the loan company/credit card provider? Would I be better to use the credit to pay for other expenses and use the unspent cash instead (which is a bit messy)?

    I'm aware that we spend a huge portion of our income on cars (around 20% for the monthly payments alone).... Unfortunately I went a bit mad with the extra income from contracting, and as both a fairly new on PCP deals, I am pretty much stuck with them (plus I am a bit of a petrolhead, which is an expensive vice!).

    HSBC Account
    Halifax Mortgage £800.00 (£10.88 overpayment)
    Council Tax £155.00
    Gas & Electric £80.00 (Estimated; Rounded-up)
    Water £32.00
    BB & Phone £35.75
    Sky £60.00
    Ikano Loan £222.03
    Honda Finance £479.14
    VW Finance £210.66
    Insurance £39.45 Ends Nov-17, pay annually next year
    EE £67.63 Ends Jan-19 -> Switch Contract Only
    Vodafone £47.20 Ends Jun-18 -> Switch Contract Only
    Home Ins. £15.52. Ends Dec-18, pay annually next year
    TV Licence £12.12
    Gym £47.00
    DFS (0%) £109.10
    Regular Saver £50.00
    Total Bills £2462.60


    Pocket Money £150.00
    Baby JISA. £25.00
    Credit Card Bill £300.00 Includes petrol
    Food Bill £320.00
    Tesco Regular Delivery £7.00
    Netflix £7.49
    Halifax Reward -£3.00 N/A
    TOTAL OUTGOINGS £806.49

    BILLS + OUTGOINGS £3269.09
    SPENDING £100.00
    GRAND TOTAL £3369.09

    SALARY 1 £2989.00 (includes 5% deduction for AVCs)
    SALARY 22 418.60
    TOTAL INCOME 3407.60
    TOTAL LEFT OVER 38.51
Page 1
    • MallyGirl
    • By MallyGirl 6th Oct 17, 11:22 AM
    • 2,098 Posts
    • 6,966 Thanks
    MallyGirl
    • #2
    • 6th Oct 17, 11:22 AM
    • #2
    • 6th Oct 17, 11:22 AM
    Generally you can't pay a loan off with credit. If you were starting from scratch I would recommend getting a money transfer card. However you are not in that position. I would contact Amex as they might be prepared to transfer the large positive to your bank since it is as a result of a refund. You won't know till you ask.
    • Jo3y83
    • By Jo3y83 11th Oct 17, 4:57 PM
    • 102 Posts
    • 226 Thanks
    Jo3y83
    • #3
    • 11th Oct 17, 4:57 PM
    • #3
    • 11th Oct 17, 4:57 PM
    Unfortunately, robbing Peter to pay Paul isn't really going to help, you're just moving the debt from once place to another.
    Debt Remaining - £7,037.00
    DFD - Oct 2018

    • EssexHebridean
    • By EssexHebridean 12th Oct 17, 11:16 AM
    • 8,230 Posts
    • 43,514 Thanks
    EssexHebridean
    • #4
    • 12th Oct 17, 11:16 AM
    • #4
    • 12th Oct 17, 11:16 AM
    Unfortunately, robbing Peter to pay Paul isn't really going to help, you're just moving the debt from once place to another.
    Originally posted by Jo3y83
    Did you read the OP's introduction post above? If so, can you explain why you're saying this as it's got me a bit confused!


    OP - if you can get the credit transferred to a bank account that sounds like the best way to go. Alternatively can you put ALL your routine monthly spending on the AMEX and then transfer the corresponding amount from the Bank to the loan? would have the same effect, just might take a few months and some careful watching of spending to achieve the same end. An obvious question but I assume you have checked where you stand with regards to cancelling the holiday?

    I'm also going to suggest that as SOON as you have the loan paid off, you immediately save a decent sum as an emergency fund - as it sounds like your income could potentially be precarious, I'm aware that in contracting, you're only as "solid" as your current contract! I'd also suggest looking to make savings where you can, and getting money put aside against any Balloon payments that the PCP deals may have - otherwise in a few years you'll be faced with borrowing to pay those. Alternatively you will then have the option of handing the vehicles back and using the lump that you've saved either without any finance at all, or at the very least with a regular bank loan rather than one of those horrendous deals.
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£656.45 (20/11/17)
    SOA Calculator for DFW newbies: Stoozing.com SOA Calculator
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