Using Credit Card to pay off Loan HELP!

PeterJohnson

Hi all

This is my first post, good to meet you all. I've followed website for a long time, now brave enough to post!

I have a loan of approx £7000 to pay and really desparate to clear it, gradually working towards it! My question is, if i pay this off with a credit card would it be better for me? I phoned up my loan company and they say I won't be any better off paying it off early which I thought I would!

I'm very good at understanding money but need help to work this out from you guys out there as from what i've seen you're all brill. Thanks in advance!

magentadreamer

Have you asked your loan company for a settlement figure? It sounds as if they don't knock off outstanding interest or PPI if it's not any cheaper to pay it off now. If it isn'tand the APR is fixed then I'd leave it where it is.

PeterJohnson

magentadreamer wrote:

Have you asked your loan company for a settlement figure? It sounds as if they don't knock off outstanding interest or PPI if it's not any cheaper to pay it off now. If it isn'tand the APR is fixed then I'd leave it where it is.

Well didn't get a settlement figure just asked if I could pay off some extra in addition to my repayments. If I got a settlement figure would it be best to pay off by credit cards and move it around to the best cards so that i'm not repayinf 4 years interest? Thanks!

magentadreamer

I would find out what the settlement figure is, then if it does make it cheaper to move it then move it onto credit cards. If they don't credit back interest etc then you might as well leave it where it is as you'll have paid the interest on it as it is and won't save anything.

PeterJohnson

Cheers! Thanks for the help

PeterJohnson

Hi again sorry to keep on!

Phoned up loan company and I will pay £8327.44 in total if I carry on as I am ovr the remaining 44 Months. If I pay the early settlement figure i will be £7709.03. Which will give me a saving of £618.41. Credit card here i come? What you think??

Bokken_2

sounds okay after all if you place the balance onto say two 0% credit cards you will be paying no interest which is a good thing.
I can see you may have a problem getting a 8K limit on a 0% card if this is the case you'll have to split the 8k onto two or even three cards.
You may want to get the cards in place quiet quickly as the settlement figure will only be valid for approximately 30days.The first settlement figure is normally free after that second or third requests incurr a fee.
Have a good read up on BT and SBT articles.
It would be easier if you did a SBT into your account and then paid the loan company from your account.

PeterJohnson

Bokken wrote:

sounds okay after all if you place the balance onto say two 0% credit cards you will be paying no interest which is a good thing.
I can see you may have a problem getting a 8K limit on a 0% card if this is the case you'll have to split the 8k onto two or even three cards.
You may want to get the cards in place quiet quickly as the settlement figure will only be valid for approximately 30days.The first settlement figure is normally free after that second or third requests incurr a fee.
Have a good read up on BT and SBT articles.
It would be easier if you did a SBT into your account and then paid the loan company from your account.

Sorry if I can't work out what SBT is, remind me! BT I know! I looked at virgin card seems to be interesting

grumbler

PeterJohnson wrote:

...I pay the early settlement figure i will be £7709.03. Which will give me a saving of £618.41. Credit card here i come? What you think??

I am not an expert in loans, but for me your current situation looks as following: borrowing £7709 for 44 months cost you £618 in interest. This is about 4.2% APR - very low interest rate. Yes, you can save £618 buy switching to 0% CCs, but be prepared that it is not easy to switch the debt to new cards every 6-9 months and it gets more and more difficult to find cards that don't charge for BTs (usually about 2%). With low Life-Of-Balance rate cards you can avoid switching debt, but they have APR 4.9%+, that is more than 4.2%.:think:

Bokken_2

PeterJohnson wrote:

Sorry if I can't work out what SBT is, remind me! BT I know! I looked at virgin card seems to be interesting

Balance Transfer - between two credit cards
Super balance Transfer - between a credit card and a current bank account

MINT MBNA & A&L allow SBT by using their credit card cheques
have a read of Martins articles on BT and SBT to get up to speed.
MNBA & A&L gave me big credit limits and the minimum monthy payments are less than other credit cards.
have a look at several to see which will be best for what you want.

PeterJohnson

grumbler wrote:

I am not an expert in loans, but for me your current situation looks as following: borrowing £7709 for 44 months cost you £618 in interest. This is about 4.2% APR - very low interest rate. Yes, you can save £618 buy switching to 0% CCs, but be prepared that it is not easy to switch the debt to new cards every 6-9 months and it gets more and more difficult to find cards that don't charge for BTs (usually about 2%). With low Life-Of-Balance rate cards you can avoid switching debt, but they have APR 4.9%+, that is more than 4.2%.:think:

Its a good point, What about if i find one for a year and I pay back the debt within that time? or 9months thats ok then isnt it?