zero percent (ish) or life-of-loan?

richard101

Hi All

background
I'd been debt free for a few years (therefore probably have a good credit rating) - then at a certain age :-) thought "what-the-point-of-it-all ..." and bought myself a sports-car.

Now I've a difficult bit of maths to do. Currently I owe 11k to zopa at 8.8%apr (and am allowed to make extra payments), and 7k to halifax at 13.5%apr (and can only make minimum payments of pay it all off).

I was thinking of moving the 7k to zopa asap for the better rate - and simplicity. And from there transfering 4k or 5k to 0% for 12/16 months (I found these 0% credit-cards are only for 'small' amounts) plus a 2/3% handling charge. Then making overpayments to zopa and then moving the 4k or 5k back after 12/16 months.

Here's the maths bit - Now I've seen 7%apr (ish) for life-of-loan with barclays, and am not sure if there's a ceiling (my total debt is ... phew ... 18k).

If it were interest-free - At best I could pay-off the lot in 14/18 months, 24 months if life gets in the way :-), or 36 months (worst case) if I change employers.

advise please?

richard

jamesd

I see that nobody answered this. The maximum any person can have in borrowing at Zopa is 15k so your best option looks to be life of balance loan first, then Zopa, if necessary taking you up to 15k. Then you can pay the Zopa loan(s) first, exploiting their flexibility.

Once you get to the point where the available credit at Zopa is high enough after the overpayments you can work out whether it's better to take another loan from Zopa to balance transfer one of the loans to it so you can pay of that debt more quickly than the fixed loan payments allow. It'll probably be best to completely clear the Zopa loans before doing this, since they will probably have the higher rates.