Loan to 0% credit card

beatthesystem_3

Hi all,
Any advise for this one?

The Idea
I have a loan with Egg @7.66% with 8650 outstanding costing £338pm, finishing DEC2009
I am thinking of taking out an Egg credit card @0% for 12 months with a 3% transfer fee, transferring £8650(+ transfer fee) to my current account (which you can do) and paying off the loan with the funds.
I will be able to repay this in a MAXIMUM of 2 year, absolute worse case!!

The Math 1st year
£8650+3% = £8909.50 (amount owed)

amount left at the end of the interest free period paying only the current loan repayment would be £4853.50

The Math 2nd year (new transfer to 0% card)
£4853.50+3% =£4999.1 (amount owed)

would then pay £417PM (which i could afford comfortably 2nd year) to clear credit within this discount period.

Conclusion:

Total amount payable if loan is left as is: £9802.00 (29 months left at £338pm) which = £1152 in interest

Total amount payable using the plan above: £8650+259.50+145.60= £9055.10
Saving: £746.90

Please Note:
The repayment period would be absolute worst case and with any luck, with my situation as it is, i will clear this debt in 14-16 months.
the figures here really are worst case, as i may even get a better transfer rate deal 2%
I am extremely careful with this sort of thing and would implement the plan with great care making sure timing are correct and payments are always made...

Anyway
Let me know what you all think:rolleyes:

Thanks...D

YorkshireBoy

beatthesystem wrote: »

Let me know what you all think

1. You're assuming Egg will be happy to extend you over £17K of unsecured borrowing.

2. You're assuming 0% deals (with 'reasonable' BT fees) will be around in 12 months time.

3. If you miss a payment, your 'loan' will revert to 16.9% (or higher) once they've withdrawn the 0% introductory rate.

Other than that, it's OK!

fistfullofdollars

Take a look at my signature as I've done exactly what you are saying. It's working really well for me.

My case:

Before: Barclayloan @ 12.9%, Egg CC at 16.9% Lloyds OD at 16.9%
After: Barclaycard @ 6.9% LOB and Marbles 4.9% till Nov.

With alittle fiddling around via my Marbles card I've got it all on 2 cards. I would check out any Life of Balance transfer deals etc M&S card. You may be paying a small amount of interest but thats it for the LOB.

Make sure you have direct debits set up to the CC for the minimum payments and you'll be ok. Its working for me as I can overpay as I couldnt.

I would just check that your loan wasnt a interest front loaded type account. You may have already paid off all the interest you owe on the account and are just paying the capital back off. Hence you wouldnt want to move it and pay interest again.

btw: I was paying just under £100 interest a month before now I'm paying around £34.

fistfullofdollars

Oh and if you do do what you suggest you must follow Martin's golden rule!

Cut the cards up and never spend on them again!

alirob12

or you can choose cards with lover transfer fee - eg 2 or 2,5% and save even more )