How do I pay from CC to loan?

NastyMatt

I have a loan of £12.5k which is sitting at 6.95% which I am paying at £314 per month. I'd like to pay 0% or at least drop that rate. Seems a bit pointless changing it to another loan only slightly cheaper so was thinking of slapping it on a (couple) of CC at the lowest rate possible.

I have a decent enough credit rating and normally get offered decent limits (currently £14k on existing CC) so I reckon I could get this whole loan on 1 or 2 cards.

The question is how do I go about it?? i.e. I get a CC it's sitting in my hand how do I pay off my loan with it? (I know it sounds daft but I hate to pay it wrongly and it not be a balance transfer and I am sitting on 16.9%.. d'oh!! :eek: )

NM

justruth

One solution is to BT the amount to your current account from however many cards you use, then pay it off from in there. Contact the loan issuer for a settlement figure so you know how much you need. If you can get the enitire amount on one credit card, the CC company will happily BT the debt as they hope you will pay them the interest when the 0% runs out, all you need is an account number and a sort code.

CLAPTON

not all CC will allow a BT from a loan...who is your with?
(typically MBNA and EGG allow BT to loans)

also will you be able to pay the CC off before the 0% runs out? if not there is a risk that you wont be able to get a 0% card when you need it.

NastyMatt

Clapton - that is my concern that I don't get accepted for another CC having not paid it off. One idea I have is to get a Life of the Transfer rate.. 3.9% as opposed to my current 6.95%

£868 a year = 6.95%
£487 a year = 3.9%

At the present rate of £315 per month it would save me about £1100.

justruth

Sounds like a plan, it's a lot easier to overpay small amounts on a credit card.

CLAPTON

yes, if you can only afford the 315 per month then it would be much less risky to get a low LOB rather than a 0% card.
but remember you may well be paying a BT fee

and you do you know what the settlement figure is for the loan (i.e. is there any penalty for paying early and also need to have a method to actually do the transfer.

oscar52

CLAPTON wrote:

not all CC will allow a BT from a loan...who is your with?
(typically MBNA and EGG allow BT to loans)

MBNA dont - they dont have a facility for a loan agreemennt / reference number. They would just tell you to transfer it to a current account, and then on to your loan provider.

CLAPTON

oscar52 wrote:

MBNA dont - they dont have a facility for a loan agreemennt / reference number. They would just tell you to transfer it to a current account, and then on to your loan provider.

you are, of course correct