Which to pay off first? any advice?

lukemed1

hi everyone,

i have a loan with citifinancial APR 22.7 % with an outstanding balance of £9,226 i'm currently paying £318 a month for the remainder of the loan which is another 48 months

also i have a halifax visa card APR 14.8 % with about £3200 spent on it and my limit is £3500,i'm in a position now to pay £100 a month extra either on to my credit card or the citifinancial loan, which one do i choose? any advice would be great!

best regards

Luke

tomstickland

Easy answer! 22.7% APR is a massive rate. Move as much of the loan onto your credit card and pay off as much as loan as possible.
Apply for a 0% credit card and see if you can move the debt to that.

jobbingmusician

Seconded.

And if you want to cheer yourself up, use a calculator to work out exactly how much interest you are going to save yourself by moving your debts around like this

citygal

I agree- the loan is the main problem at the mo, pay as much as you can into that.

Good luck Luke! Hope 2006 is the start of better things to come

tomstickland

48x318 is £15264. So you're going to pay just over £6K in interest over two years!

lukemed1

hi there, how would i go about moving the loan onto my credit card? sorry i'm new to all this!

best regrds

Luke

tomstickland

Apply for a 0% credit card that has 0% balance transfer fees. For example, Lloyds TSB Platinum (look at https://www.stoozing.com and click on tables for a handy list). When you apply online there is a box marked "balance transfer, how much do you want to transfer?"). Or you can wait until the card is approved and then phone up or go online and request a balance transfer. You balance transfer the debt from your loan to the credit card. Check what your loan conditions are though.

lukemed1

thanks alot tom! will look into it straightaway!

Luke

tomstickland

Remember BALANCE TRANSFER though, not cash, or cheque, or make a payment!

southernscouser

Just make sure you aren't penalised for making extra payments on to your loan!

Whats your credit rating like? The best loans currently have APR's of around 6% so shop around.

The same for your credit card. Try a 0% card or a low life of balance card!

YorkshireBoy

tomstickland wrote:

Remember BALANCE TRANSFER though, not cash, or cheque, or make a payment!

In which case the OP will also need an SBT card, as it's unlikely that LloydsTSB (and many other cards) will agree to balance transfer from a loan directly.

To the OP...

For further information, read the following article.

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1085355871,12390,

Egg Money may be a possibility, but also consider the Egg Card for it's 2 free anniversary offer periods. You'll pay an initial BT fee to Egg for the first BT on the Egg Card, but this may be offset somewhat by the 2 free BT's in 2007 & 2008. Mint may also be of interest, as you can use cheques at 0% (with a fee) and this also has an anniversary offer - albeit only once. Just keep another credit card available for debt 'shuffling' purposes to make best use of these anniversary offers.

Do not take any action until you fully understand the T&C's of your chosen card. Any specific questions from the article above, post back on the credit card board.