What to Do?

jules68

I have an egg loan which is just short of £5000 at 7.9% I pay £168 month and have 31 months remaining.My husband has just got an M&S card and has 3.9% LOB. Would it save money to transfer onto it or shall i just carry on with loan paying a bit more each month.I know M&S you cannot pay loans off so if i did this it would take a lot of juggling. Any advice would be great

bank_of_slate

Have you checked if there is an early repayment penalty on the loan, some have!
...Linda xx

CLAPTON

whether its worth while depends upon the cost of paying off early (if anything) and whether you have to pay a BT fee with M&S. Also you need a mechanism to actually transfer the debts.

as i see it you will pay about another £540 in interest if you simply continue your current loan.
at 3.9% paying a similar amount per month you will pay about £250 in interest so a potential saving of about £290

it may be that the M&S card is fee free so then there is only the issue of any penalty for early repayment.

next you need to consider how you actually transfer the money. i dont think the M&S allows a BT to your current a/c (then you could simply pay off the loan from your current a/c) nor will allow a BT to a loan.

so the generally accepted method is a bit complicated but is well tested.

you will however need to get a EGG MONEY card (not an EGG card but an EGG MONEY card). the great thing about this card is that you can have a positive balance and when the balance is positive you can BT to your current a/c without any fees.

so it works like this
start will an empty egg money card.
BT from egg ot M&S so now you have a debit of 5000 on M&S and a credit of 5000 on the egg. Now BT between egg and current a/c (fee free as the egg is in credit) and then pay off the loan from the current a/c.
a bit complicated but well proven.