Loan Repayment via Credit Card?

urmum

Hi there - I'm hoping someone might be able to help with some advice...?

I have an outstanding loan of just under 4k with RBS and am wondering if I can pay this off with a new credit card to take advantage of an introductory 0% offer?
I had a quick chat with an advisor at RBS to get my early repayment figure and he informed me this would be a 'New Purchase' rather than Balance Transfer and suggested I apply for their 6mth 0% introductory offer.
I then called Santander to ask their representative if this is do-able and was told that it would count as a cash withdrawl and therefore cost a fortune in interst (the sole reason I am doing this is to avoid the 40quid interest every month)

Can anyone please advise if 1. this is possible; and 2. would it count as a balance transfer or a new purchase?

I hope this makes sense.

Cheers.

Tixy

If you were able to get a super balance transfer card then you could do this as a transfer (although the fee is around 4% rather than 2.5% for a card to card transfer).

With a super balance transfer you move the cash to your current account and then pay of the loan from there. Only a few providers do this type of card - http://www.stoozing.com/sbt.php
You'll need a good credit history to get this type of card, even more so to get a sufficent limit to transfer £4k over, along with a decent salary.

Before you go ahead you need to consider if this will save you money. What is you APR on the loan? how long do you have left to pay?

If you move to a 0% deal for say 14months then you will have paid the 4% fee up to that point andafter than it will revert to a much higher APR - around 18% is typical. How much will you have actually paid off within the 14months? Never bank on being able to get another card after the 0% deal runs out as these cards are much harder to get now.