Balance transfer or personal loan

dre_day_1984

Hi all, just a quick question as to which option is better for me a personal loan or a balance transfer card.

I have one credit card balance of £9500 which i am paying full interest on.

I have avoided applying for a loan to cover this high interest debt, or doing a balance transfer, as i have been in the process of purchasing a home and didn't want to risk affecting my credit rating by applying for credit.

With the house in the bag now, what do people think is the best option?

Take a loan of £10k out and pay back monthly or do a balance transfer on a 24-32 month deal with a 4%(ish) fee? Strictly speaking, the credit card is a cheaper option, but am i more likely to get accepted for a loan from my bank?

I ran the likelihood tests on the balance transfer cards and the decent ones show up as 40% chance of being accepted. My credit rating is 999, and even though i realise lenders don't see this, it must count for something!

All replies are welcome, and i thank you in advance.

debt-freeoneday

Hi there

Congrats on your new home purchase!

If it was me, I'd go for the lowest interest rate option which sounds to me like the credit card balance transfer. Is 4% the lowest rate you could get? I'm not an expert but I imagine there are better deals out there at 0% balance transfer for up to 33 months, there would be a transfer fee on top. I'd then throw any spare cash at your card during that time to get it paid off.

If you have your new home all sorted out now and your credit rating at a decent score then personally I think this would be the best option.

Good luck with whatever you decide!

[Deleted User]

A bit more detail please.

What's the APR on your current card?

What would the total repayments be, on your proposed loan?

What will the APR go to, on the 0% card, once the 0% expires?

How much can you pay off the 0% card, before the 0% expires?

dre_day_1984

thanks for your replies so far.

debtfreeoneday - sorry i think i wasn't clear enough - i was talking about a 0% balance transfer card, with a 4% fee for the total debt which is £9500.

Bob - my current card has 24.9% APR.

The total repayments on the proposed loan would be something like £10,070 over the 3 years.

The APR once the 0% is over would be 18.9%.

I would be bale to pay off the full amount before the 0% is over, hence leaving me debt free.

Assuming i am accepted for both loan and balance transfer card, the card is the cheapest option, but i'm just wondering which i would be more likely to be accepted for.

thanks again

[Deleted User]

Which one you would be more likely to be accepted for, is a difficult (probably impossible) one to answer.

I'd suggest approaching your existing bank, but beyond that, I can't say.