Shall I pay off loan and add to credit card?

lara400

Hi,

Got a dilemma and want to see what to do:

1. I have a ~£1600 loan left to pay (I pay £325 a month). This has 5 payments left to make.

2. I have a credit card to which I have used £3700 and I pay the minimum amount of about £80 a month. I plan on paying this off by April/May next year anyway. I have a limit of £6000.

3. I have ~£3400 (credit) in my bank account (when I get paid at the end of next week). Plus I have a £5000 overdraft limit. After all the normal shopping and stuff (don't need anything big to pay in the next month) I probably will have about £400-£500 left in the account by the time I get paid again in January.

So, I ask is this - shall I pay off my loan from my credit card or my normal bank account. I don't really want to pay off my normal bank account - but really do not want to pay £325 a month off the loan - if I pay off through the credit card I think the repayment will increase to about £120 a month or so - not too sure what my interest is.

Or I can get another credit card and pay it off that - no idea how my credit rating is so not too if I want to apply and get rejected - I only need £1600. I hate paying off £325 !!

Thrugelmir

What method are proposing to use to repay the loan off through the credit card.

lara400

I just assumed you can pay off a loan through a credit card? Can you not do that? Sorry - I am new to this - this is the first and only loan I have.

I was thinking of paying off the whole amount via my credit card - as I would have the money due to my limit being £6000.

Nada666

Your post does not make much sense. Why do you not like paying off your loan? What has 'like' got to do with it? Why don't you know the interest?

You do not 'like' paying your loan but will somehow 'like' paying £740 off your credit card each month (in addition to loan repayments).

Your mortgage and bills and spend over Christmas will be £2,900? Do they need to be that high? Or does that include Christmas? Or is that a regular month's spending.

I would save the £4/500 and concentrate on paying the loan and credit card. You'll be paying more than £1,000 through to May for the two of them.

Nada666

If, presently, you choose to only pay the minimum payment of £80 off a £3,700 balance then the very last thing you want to do is to add more debt to such a 'flexible' repayment option - keep paying off your loan. If you add the remainder of the loan to your credit card there is no way you will start to pay off £1050 per month. Instead, as you imply, you will only pay £120. A bad idea.

redpete

The interest rate you pay on the credit card or overdraft are likely to be more than on the loan, if so then it makes no sense to use either to pay off the loan early. You might reduce the monthly payment but you would pay much more in interest overall and it will take far more than 5 months to pay it off.

No-one can give you useful advice without knowing the interest rates on all three and what you hope to achieve by your suggested action.