Transferring a Personal Loan onto Credit Card(s)

sjj80_2

Hello

I have a personal loan with Natwest of approximately £8,000 to be paid over four years with interest ofapproximately £1,700. I have read about interest free balance transfers and cards that hold a low interest for the life of the transfer and I wanted some advice on which type to go with and what company.

Additionally, I am wondering how you do it. Can you transfer the balance straight off the loan or do I first have to draw cash off a credit card to pay the loan and then transfer the balance from the credit card?

All advice is greatly appreciated - thanks!

Sarah

YorkshireBoy

The Egg Card, MBNA (and sub-brands eg Virgin, A&L, & Abbey), and Mint will allow you to get 0% cash into your current account - either directly by super balance transfer (SBT) or by using cheques - for anything up to 13 months.

However, with all the above you will pay a balance transfer/cheque fee of anything up to 3% uncapped every time you move the balance at the end of an introductory period. Also, who's to say 0% balance transfers will still be around in 12 months time? If they aren't, then once they put you on circa 17.9% APR you'll be looking for another loan to pay off the card balance.

So, perhaps a better option would be to utilise the Egg Money Card Trick with a fee-free M&S LOB card. This would enable you to significantly cut the interest (from around 10%[?] now to 4.9% APR) charged over the loan period.

Several things to be aware of:

• You may not get enough credit limit to allow you to move the loan over.
• The minimum payments will be 3%, which may be more than you're paying now.
• Miss a payment and your loan goes to 17.9% APR or higher.
• Factor in any early settlement penalties with your loan.
• Keep your payments at whatever you start at, ie don't just pay 3% of whatever the reducing balance is each month.
• DO NOT make any purchases on the card, even though you may be tempted by the 0% rate. This is because, after 10 months or so, you'll be paying at least 17.9% APR on them until you clear the loan amount transferred on to the card.
• Apply for Egg Money first (and M&S quickly afterwards) because the M&S LOB deal is useless without your Egg Money 'routing' card.

Good luck!