Is it really cheaper to balance transfer

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p00
p00 Posts: 824 Forumite
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Barcalycard have offered me to transfer £10k @ 6.9% and said that on the assumption that it was over 5 years , although I could pay it off a lot quicker if I want, the interest ended up £3319.89.
This is a lot more than a loan from say Tesco at a higher rate of interest but generates interest of £2065 over 5 years.

So how can this be so if the interest rates look better from Barclaycard?

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  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    If you borrow 10,000 at 6.9% APR over 5 years and pay equal amounts each month then the monthly payments would be about 197 and you would pay about 1,800 in interest
  • p00
    p00 Posts: 824 Forumite
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    oh thats odd as they quoted me last night at £225 per month and said that would mean £3319 interest to term.

    Your calculation is much more interesting and worthwhile in that case

    xx
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    p00 wrote: »
    oh thats odd as they quoted me last night at £225 per month and said that would mean £3319 interest to term.

    Your calculation is much more interesting and worthwhile in that case

    xx


    that would correspond to an APR of round 12.5%

    I'ld be looking for some facts in writing here.
  • withnell
    withnell Posts: 1,629 Forumite
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    Balance transfer fee plus interest on that might push it over
  • p00
    p00 Posts: 824 Forumite
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    no transfer fee for longer terms loans as such.

    isnt there always 2 % figures when you look at loans so could it be that one is 6.9 but the other one (is it apr?) 12.9% so a bit misleading?

    Ill give them another ring

    xp00
  • p00
    p00 Posts: 824 Forumite
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    rang them again and now they can only give me the 1st months figur which is a payment of 2.5% ie £250 plus an interest payment of £55.33 which then reduces each time you pay some off.

    Far too confusing and cheaper to get a proper loan by the looks of it.

    thanks anyway

    xxp00
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