Just want rid of it now !

coops024

Hey guys,

Any answers to this question would be gretfuly received !

As you can see from my sig I have just over £11,000 left on an A&L loan @ 5.5% (not a bad rate in todays market)

We have been saving to get this paid off asap and currently have £5500 so far in an ISA

I have since found out that the intrest is front loaded and think that by the time i save enough to pay it off early I will have paid most (if not all) of the intrest anyway :mad:

So wahat I was thinking was to apply for a CC and pay the loan off with that (and the savings) so to have it all on 0% :rolleyes:

What I dont know is... Will I get a Credit Limit of 6K (what are the chances ?) I must have an excelent credit rating as ive never missed a payment for anything and always had some sort of debt

But also is this actually a good idea? I would have to pay a BT fee of up to 3% but that got to be better than 5.5%

thanks for reading !

coops

CLAPTON

assuming you are earning more than 5.5% in your ISA, then saving is better than repaying the loan.


if you can get 0% BT deal then its worth considering but bear in mind
- now do you get the money out of the CC (only a few CCs allow you to BT to your bank a/c or pay off a loan )
- what will happen when the 0% deal runs out .. you may then be stuck with a very high APR CC.
- and of course you may not get a sufficient limit to repay all the loan but if its a flexible loan that reduces the total interest payable, then it may still be worth paying as much as possible

coops024

hmm ... Not sure what the intrest in the ISA is ? I think its more than 5.5%

Not thought about how to transfer the money to the loan I assumed you could just transfer to your bank account guess not .. will have to make sure i can if i decide to go ahead with this

When the 0% deal runs out i would BT to another deal (balance would be alot less by then .. say £3000 ish)

The CC limit is the deal breaker for me ... I would need the full £6k or its not worth doing :mad: Also its not a flexible loan so there is an ERC for this as well

CLAPTON

makes sense to ensure you're getting a good rate on the ISA in any event

CC that allow BTs to your current account include all the MBNA cards and eggmoney.. but obviously check before going ahead.

but with such a good rate its only marginal finance wise

latecomer

If the interest is front loaded is there any gain from paying it off early?

MinBlack

latecomer wrote: »

If the interest is front loaded is there any gain from paying it off early?

My loan with HSBC is front loaded, however if I want to pay off the loan early I only pay 1 months interest as a penalty, if I phone HSBC and ask for a settlement figure the total is considerably lower than the amount showing as outstanding on internet banking.

CLAPTON

MinBlack wrote: »

My loan with HSBC is front loaded, however if I want to pay off the loan early I only pay 1 months interest as a penalty, if I phone HSBC and ask for a settlement figure the total is considerably lower than the amount showing as outstanding on internet banking.

if you only pay a months interest penalty and so the settlement figure is considerably lower than the amount showing as outstanding, then clearly your loan is NOT fronted loaded.... in fact NO 'ordinary' loans taken out after May 2005 are front and many before that too.