CC versus Loan

scotslad

Hi all its my first post

I am a bit thick when its comes to things like this but here goes

I have a personal loan of £ 6000 (24 x 275 a month) and have made 10 payments to date. My settlement figure is £ 3700 as of today

I now have a super balance transfer credit card which gives me 15 months 0% on SBT with 3% fee

Would I save money by doing a SBT for the £ 3700 into my current account to pay off loan.

????

Thanks in advance

NickX

I work out you would save £39 by doing what you propose.

Basically you would pay £6600 ( £275 x 24)

By transferring the debt using a Super Balance Transfer you pay :

£2750 already paid ( £275 * 10)

£3811 to be paid ( £3700 transferred at 0% + BT fee of 3%)

Therefore by transferring you pay £6561, therefore a saving of £39.

There are 14 months left to the loan, and 15 months on the 0% promotion so this is very comparable.

You may be able to make a little more on the Super Balance Transfer route by making only the minimum payment whilst in the promotion period and saving the rest in a high interest savings account, however you MUST pay the full balance off before the promotion expires otherwise you will end up paying interest on the Credit Card which will negate any saving made.

If you feel you are disciplined enough to go the savings route I suspect that you would save around £70 - £75 in total.

Now it depends if that is enough to make the change worth your while

scotslad

Thanks for reply

Idiophreak

Just food for thought...I had 4k on 2 loans and 4k on a 0% CC. The 8k on the loans has now been paid back, the CC is still sitting there and I expect I'll have to pay BTF again soon to move it to a new card...Clearing loans is easier than clearing CCs...