Best way to repay Zopa Loan

blueelephanttrunk

Morning all,

I have a loan with Zopa, current balance is £5389 (interest is 12.7% per year) and the settlement amount is £4785.

If I transferred my balance onto a 0% credit card, would this be classed as a balance transfer or would I be able to class it as a payment? And does anyone know if Zopa accept credit cards as a form of payment?

I'm just looking for a better way to pay this off. My current repayments are £200 a month and I could go up to about £250 for a better deal.

What do you think?

paddyrg

I doubt you'll be able to drop it onto a 0% card at all, to be honest, as any fees would need to be recharged, wiping out your advantage.

But with zopa and ratesetter there is no penalty for overpayment, so just overpay as fast as you can?

blueelephanttrunk

Hi Paddy, thanks for replying. As far as I'm aware, there is no early repayment charge with Zopa though?

blueelephanttrunk

Does anyone else have any thoughts on this?

Tixy

You cannot balance transfer from a card to a loan.
I believe Zopa will not accept payment by credit card so you could not do it as a purchase.

The only way I know that you could move it, or some of it, to a card would be if the card allows super balance transfers. This is where you transfer money from the credit card to your current account, which you could then use to overpay the loan.
If you don't have a card that allows SBTs (and most don't) then this method would be dependant on you obtaining a card that does and what credit limit you would be able to get. Also there is a SBT fee of between 2-5% depending on the card that you would need to factor in.

jamesd

Easy enough to do this. Credit cards like Virgin and others operated by MBNA offer the ability to transfer a balance from a bank account to the card, which sends money to the bank account. There's a 4% fee to do this so you're well ahead of keeping the Zopa balance and paying 12.%. APR for the card ends up being well under 3% until the deal ends.

There's a way that's possibly cheaper, getting a 0% for purchases card and putting all of your spending on the card, using the money you would have spent to make overpayments on the loan. Whether it is cheaper depends on how long it takes to accumulate enough to clear the loan. For anything that you can't clear this way in about four months you'd be better off using a balance transfer. Family and friends might be willing to help you by letting you pay for their shopping and paying you cash.

There's a cheaper option than a balance transfer card if the plain purchases card doesn't work for you. The M&S 0% for purchases credit card. You can buy Sterling travelers cheques from M&S with it and avoid the balance transfer fee because it's treated as a purchase. Just pay the cheques into a bank account and pay off Zopa from that account. So no charge like a purchase deal, but immediate money like a balance transfer.

Zopa doesn't take credit card payments directly but that doesn't matter.

Declaration of interest: I have both a loan via Zopa and lending via Zopa, though at the moment I'm not actively making new loans.