Loans to Credit Cards?

DiggingOut

Depends on the loan, Jack. If it is based on rule of 78, yes, it rarely pays to pay it off early.

Reedi above has a flexible loan, so no rule of 78. Not sure about the HSBC loan.

Sometimes even with rule of 78 it pays off if you can get a very low life-of-balance offer on a card. But usually once you are into one of those loans, you are stuck.

Seems like I heard recently they are going to bring in some regulations on these loans, but don't know what is going on.

psittack

Hi,

I've got a HSBC loan at a Graduate rate of 5.9% - they tend to be pretty generous with graduate/post grad stuff.

One thing I'd like to know is - how do you pay off a loan with a credit card?

I just called HSBC to pay off my £4500 loan with my HSBC Mastercard (with intent to immediately transfer it to my much lower APR Capital One card).

There's no early repayment penalties on the loan. If I pay it off right now I get an interest rebate of over £500, hence my desire to save this cash by transferring to CC.

The operator said that would be fine, but the system wouldn't let her do it - she then put me on hold & 'checked with a supervisor'.

When she came back I was told it's not possible to pay off a loan with either of my credit cards. The only option available was to withdraw cash from the credit card to pay the loan off. Cash withdrawal percent is 1.75. This would mean a charge of £68 to pay off my loan.

After she told me this she couldn't get me off the phone fast enough, which makes me wonder if she really did speak to anyone, or whether she knew what I was up to & was told to say no, even though it IS possible to pay it off with a credit card.

Needless to say, I'm not happy about this.

My question to all of you is this:

Have any of you succesfully paid off a bank loan using a credit card? And if so, then how?

It seems silly that it's not possible - after all, don't credit card companies boast about how their cards are accepted in millions of outlets worldwide?!