Paying off a loan with balance transfer credit card

Gaz23

Good evening,

I hae a small loan and was wondering if it is possible to pay this off with a balance transfer credit card.

Tesco have a good deal on with the 22 month balance transfer and was wondering if/how i would go about it?

Can i apply for the card and get them to clear the loan then may off the card monthly?

guesswho2000

No, not directly. However, if you have a card which will allow you to transfer money to your current accoutn (such as MBNA) you can use one of them to pay it off. MBNA Platinum is offering 20/22 months 0% with a 4% fee to transfer to current account, which would achieve what you're looking to do.

If you have a card which will do this even at standard rate, you could then balance transfer the resultant debt to the Tesco card as normal. Tesco, too, offer money transfers, but as with RBS/NatWest cards, it's charged at the standard rate at all times, so wouldn't be suitable for paying the loan directly.

thenudeone

The only way to do it is with one of these:
https://www.stoozing.com/sbt

Gaz23

Thanks Guys. Going to stick it out for a while! My CC doesnot allow a BT to a loan

sfax

If you already have another CC, you can get the Tesco 22 month card too and pay for absolutely everything you can on your regular spending with your other CC and instead of paying the balance in full each month, make a BT to Tesco. I have the Tesco 22 month CC and there is no time limit on when you can transfer at 0% (most cards specify 1-3 months).

Depends how much the loan is, what limit you get on the Tesco card and how much you spend each month.

Gaz23

Thanks sfax i will look into that!

sfax

And if you want a real life example of how this works, I did almost exactly as described and moved an 8% APR loan to a Tesco CC and it works out at the equivalent of a loan at 2.9% APR (if you can pay off the balance completely with constant monthly amounts during over 23 months, otherwise you'll need a second BT when it ends).

If you can bag two 0% deals back to back, the equivalent loan APR is only 2.2%. This is higher risk as it assumes you'll get another deal as good as the first when the first one ends (you may have a worse credit rating in the eyes of some lenders because of the extra CC)

And one last thing, Nationwide is much better at the moment as they are doing 1/2 price handling fees but you would need to make all balance transfers within the first 3 months.