my zopa loan or cc??

jayjayuk

hi all im trying to spring clean my finances and get rid of my zopa loan....

i currently ow £2300 of a 4750 loan inc intrest (originally £4100) half way through 3yr deal @ £136 a month

i have a b/c 4.9% lob with £1600 of £2500 used
a boi gold card £0 of £3000 no offfers 15.9%
nationwide gc £0 of £9250 no offers 16.9%
i have a 3k od limit used about £200

£500 in savings

ok i have recently made a purchase to myself using paypal withdrawing £2000 in total from my boi gold card (as a purchase).... so my card is now £2000 of £3000 used in limit

i have done this to give me hard cash to decide what i want to do...
i want to pay off my zopa loan and if i pay it off it will be reduced to £1800 or around that figure...

my question is will b/c give me a balance transfer option if i clear it again??? as they did this last time i cleard it took a month or so though

as this would mean i could use £500 of my savings to pay off my boi card and transfer the rest to my b/c leaving me with just under 1k to pay back on a high intrest card i have around 16 months left to pay on my zopa laon.... and could pay the 1k back in under 8months and leave the rest of my money to pay off my b/c at 5.9% as the minimum payment on it is around £15 but i pay around £50 a month + any intrest so about £60+ in total

i want to give myself more flexability and maybe even get another balance transfer in a few months to help pay off some more of my card..

i am unable to get an mbna card and i dunno y?? :S anyway what do you ppl think???

stephane_2

Barclaycard is generally very good at offering regular offers on balance transfer. So if you were going to clear it, likely that they will offer you within a short period of time a life of balance transfer probably at 6.9%, but of course nothing in life is guaranteed!!

CannyJock

Zopa loans have the nice feature that you can clear them whenever funds allow. What's the APR you got on your loan?

Having anything in savings earning presumably less than 6.125% is pointless when you have debts costing you 4.9/80% in interest.

Barclaycard advertise a 6.9% LOB offer so that may be an option to you - http://www.barclaycard.co.uk/personal-home/cards/balance-transfer/index.html

jayjayuk

thanks for the link...

i know zopa offers that feature, but it only reduced my payment to £105 paying £500 and its still over 18 months

my zopa loan is around 14% which paid off my old everyday loans at 70%+ !!!!!!

now ive learnt how to manage money a lot better and how to get deals...

jamesd

jayjayuk, what's the running interest rate on the loan via Zopa? It's probably around 12-13% once the Zopa fee that you've already paid is taken out (it's included in the APR but you're not paying it any more, you already did). So that lower 12-13% rate is what you're currently paying for the loan and what you need to compare to for other deals.

CannyJock is almost right about savings but you do need some emergency money because you can't rely on the credit being available when you're in need of it. £500 doesn't seem unreasonable for the certainty that it's there when you need it.

Zopa should be able to reduce the term if you ask them to put overpayments towards doing that instead of making the payments lower. But why do it? You can overpay at any time except the week around your regular payment date so all you do is lower your flexibility to vary payments if you shorten the term. Better to keep the flexibility so you can not overpay just before or after a holiday or Christmas or emergency repairs to a car or home.

If you're making minimum payments on the cards, try adding a standing order to pay off £1 more a month. That way the cards won't report that you're making only minimum payments, something that may reduce your ability to get credit a bit.

Also try to put all of your regular spending on a card that has no running balance, so that you benefit from the interest free period the cards offer. If you can't get a balance transfer deal, try a 0% for purchases card instead. When you spend on that card, put the amount spent in as an overpayment on the most expensive current debt, either a card or Zopa, whatever it happens to be. Don't pay more than minimum plus a Pound on a 0% for purchases card until the day before the deal ends.

If you haven't done it, give Barclaycard a call to see whether they will let you add more money to the balance transfer you already have. No harm in asking and that gets rid of the uncertainty and maybe saves you some money. Tell them the rate you have elsewhere and ask whether there's a balance transfer offer available and if there is, whether they are interested in increasing your credit limit so you can transfer more. It's more profit for them, just a case of them deciding whether they want to do it or not. The worst they will do is say no... and they may instead say no, but tell you that there'd be an offer waiting for you if you cleared the current BT.

Best not to pay more than a Pound above minimum on the Barlcaycard. That's cheap borrowing so anything more than minimum plus a Pound is costing you extra interest that you could save if you put the money towards one of the other places instead

Why do you have the Nationwide card with am unused £9250 limit? There's a very rough rule that on cards you might reasonably easily get up to half of your income in total credit limits, so you might open some room for another card offer if you cut the limit on the Nationwide card, or cancel it (cut seems safer at the moment). But first call them up to ask whether they have any balance transfer offers, just in case.

Declaration of interest: I have loans to me via Zopa, loans made by me via Zopa and lending offers at Zopa that might be used. I haven't checked whether I'm one of those who lent to you, don't intend to do so and in any case it won't change what I write to you here.