Paying off a loan with a 0% card - transfer or new business?

Skintski

Hi Folks

I need to ask a couple of questions regarding a 0% credit card.

My partner has a loan with a high interest rate on it. He assures me he was turned down only once before being accepted for this loan so it is more by bad luck than having no credit rating (Experian rates him as fair - no CCJs etc). We are looking to pay off this loan assuming the settlement figure is favourable by taking out a 0% credit card and paying that off instead. My only concern is whether he will be rejected or not, I will not be taking a card out for him and our finances are all separate as my credit rating is excellent.

Is paying off a loan with a card considered as a transfer or is it effectively a new purchase? I am trying to work out if we will be looking at a transfer fee or not.

Also, once the card is paid off which is likely to be within about 8-9 months, how easy is it to cancel or do they expect you to keep and use them for a certain period of time?

I've not been in this position myself so apologies if these seem like silly questions.
Many Thanks

stephane_2

First very unlikely that the loan provider will accept a credit card payment to settle the loan...unless you get a card which would allow you to transfer fund directly to a current account and pay off the loan that way, only a couple of provider offer that option I.e MBNA....there will be a fee of about 4% on the total transfered, getting a card at 0% will also depend on how good is credit report is....also if he never had a credit card before then his chances of getting a card with a 0% offer on balance transfer are almost nil.

Skintski

There is obviously more complications to this than I first thought. He has had a credit card before, in fact we only cancelled it recently and he'd had it for years and not really used it.

Thanks Stephane

stephane_2

Then if he had a card before and was well managed and has a decent credit report he might get a chance at getting another card. You need to check with your loan provider if they would accept a credit card payment...you never know they might. Also remember that even if he gets accepted for a credit card the limit he will get might not be sufficient to cover the balance of the loan.

Skintski

We shall definitely look further into that and be sure to ask the loan company the question. Thanks again.