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Pay off homeowner loan with CC transfer?

catriona79
Posts: 855 Forumite
Hi All,
Some of you may be vaguely aware of my situation from my earlier posts. I have a bit of a conundrum for you, hope you can give me some opinions.
Roughly a year ago I took out a homeowner loan for £13k. It is for 8 years, the interest is 2.79%. I pay off £151.25 each month and roughly £29 of this each month is interest.
I wonder whether it would make sense to apply for a Credit card which could do a money transfer to my bank account (even if only for £4-5k) and use all of that money to pay off some my loan. MBNA offer it at 4% for 31 months.
Is it worth the hassle?
As an aside (and for context), I have also got savings, which go some way towards neutralising my debt, including credit card debt.
My credit cards
Virgin - £5130 - 0% ends Jan 2016
Tesco - £2325 - 0% ends Oct 2015
NatWest - £3450 - 0% ends March 2015
Savings
ISA £5760
Nationwide current acc paying 5% - £2500
2 TSB accounts paying 5% - 2 x £2000
Lloyds acc paying 4% - £4050.
Other savings £1000
As for using my current savings to pay off my debt, that's not the route I want to go down, unless absolutely necessary.
My savings give me options, such as being able to freelance, which I may need to do in a few months' time and also give me a rest from anxiety, which I used to feel before I had the savings.
Currently, in addition to paying off my cards and the loan, I am able to save £500 a month. This is due to having a lodger. However, I am very seriously considering not having a lodger any more, as I would love to enjoy my home, which would make me feel much happier.
Any advice gratefully received
Thanks
Some of you may be vaguely aware of my situation from my earlier posts. I have a bit of a conundrum for you, hope you can give me some opinions.
Roughly a year ago I took out a homeowner loan for £13k. It is for 8 years, the interest is 2.79%. I pay off £151.25 each month and roughly £29 of this each month is interest.
I wonder whether it would make sense to apply for a Credit card which could do a money transfer to my bank account (even if only for £4-5k) and use all of that money to pay off some my loan. MBNA offer it at 4% for 31 months.
Is it worth the hassle?
As an aside (and for context), I have also got savings, which go some way towards neutralising my debt, including credit card debt.
My credit cards
Virgin - £5130 - 0% ends Jan 2016
Tesco - £2325 - 0% ends Oct 2015
NatWest - £3450 - 0% ends March 2015
Savings
ISA £5760
Nationwide current acc paying 5% - £2500
2 TSB accounts paying 5% - 2 x £2000
Lloyds acc paying 4% - £4050.
Other savings £1000
As for using my current savings to pay off my debt, that's not the route I want to go down, unless absolutely necessary.
My savings give me options, such as being able to freelance, which I may need to do in a few months' time and also give me a rest from anxiety, which I used to feel before I had the savings.
Currently, in addition to paying off my cards and the loan, I am able to save £500 a month. This is due to having a lodger. However, I am very seriously considering not having a lodger any more, as I would love to enjoy my home, which would make me feel much happier.
Any advice gratefully received

Thanks
* * * Catriona's Credit Card Countdown * * * from -£16k to debt neutraldom - for my debt diary click here
Barclaycard -£5,867.52;
mbna1 - 3,009.22
mbna2 - 1,755.70
Savings £5,017 MFiT #25 £2,627/£10k; daily interest £5.04
Barclaycard -£5,867.52;
mbna1 - 3,009.22
mbna2 - 1,755.70
Savings £5,017 MFiT #25 £2,627/£10k; daily interest £5.04
0
Comments
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catriona79 wrote: »Hi All,
Some of you may be vaguely aware of my situation from my earlier posts. I have a bit of a conundrum for you, hope you can give me some opinions.
Roughly a year ago I took out a homeowner loan for £13k. It is for 8 years, the interest is 2.79%. I pay off £151.25 each month and roughly £29 of this each month is interest.
I wonder whether it would make sense to apply for a Credit card which could do a money transfer to my bank account (even if only for £4-5k) and use all of that money to pay off some my loan. MBNA offer it at 4% for 31 months.
Is it worth the hassle?
As an aside (and for context), I have also got savings, which go some way towards neutralising my debt, including credit card debt.
My credit cards
Virgin - £5130 - 0% ends Jan 2016
Tesco - £2325 - 0% ends Oct 2015
NatWest - £3450 - 0% ends March 2015
Savings
ISA £5760
Nationwide current acc paying 5% - £2500
2 TSB accounts paying 5% - 2 x £2000
Lloyds acc paying 4% - £4050.
Other savings £1000
As for using my current savings to pay off my debt, that's not the route I want to go down, unless absolutely necessary.
My savings give me options, such as being able to freelance, which I may need to do in a few months' time and also give me a rest from anxiety, which I used to feel before I had the savings.
Currently, in addition to paying off my cards and the loan, I am able to save £500 a month. This is due to having a lodger. However, I am very seriously considering not having a lodger any more, as I would love to enjoy my home, which would make me feel much happier.
Any advice gratefully received
Thanks
Why would you even dream of switching a 2.79% loan to a 4% loan?0 -
Hi Glentoran,
Thanks for your response. It's 4% balance transfer fee, for 31 months.
The APR on the loan (I.e. annual interest) is 2.79%.
Unless there is something I have missed...* * * Catriona's Credit Card Countdown * * * from -£16k to debt neutraldom - for my debt diary click here
Barclaycard -£5,867.52;
mbna1 - 3,009.22
mbna2 - 1,755.70
Savings £5,017 MFiT #25 £2,627/£10k; daily interest £5.040 -
You seem to have approx. 15k in savings, why not just pay off the loan, you would benefit from a reduction in the interest you pay on it for early settlement.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0
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Can you pay a chunk off the loan without penalties?
Have you calculated what you would save if you moved some of the loan to a CC?
You have a decent cushion of savings now, could you now use the £500 you save a month towards the loan and pay it off in two years?
Each to their own, but the complexity of having 5 lots of debts and 5 lots of savings would give me anxiety.
Good luck with whatever you decide.ISA £1675MiniMoohound savings £3685.86 :T Plus £3800 CTF
'MrMoneyMuststache' my new hero, Martin Lewis my long time hero
Poacher turned Gamekeeper
Roadkill rebel No 52 Aug £1.34p Sept 24p Oct 5p Nov 5p Sealed pot Challenge No 403 £176.66(2014) :staradmin NOV NST No 200 -
Can you pay a chunk off the loan without penalties?
Have you calculated what you would save if you moved some of the loan to a CC?
You have a decent cushion of savings now, could you now use the £500 you save a month towards the loan and pay it off in two years?
Each to their own, but the complexity of having 5 lots of debts and 5 lots of savings would give me anxiety.
Good luck with whatever you decide.
Thanks MoohoundI'll have to work out the interest I'd pay a month and compare the two.
I know, it might be a bit baffling with all the savings etc, but I think it keeps my brain ticking over! :rotfl::rotfl: I think I need that, otherwise I am trouble
You're right about the £500 a month being used to pay off loan, but £450 of it is my lodger's rent - and I won't get that now that I've given him a notice. But that doesn't matter. I'll just do it slowly.* * * Catriona's Credit Card Countdown * * * from -£16k to debt neutraldom - for my debt diary click here
Barclaycard -£5,867.52;
mbna1 - 3,009.22
mbna2 - 1,755.70
Savings £5,017 MFiT #25 £2,627/£10k; daily interest £5.040 -
catriona79 wrote: »Hi Glentoran,
Thanks for your response. It's 4% balance transfer fee, for 31 months.
The APR on the loan (I.e. annual interest) is 2.79%.
Unless there is something I have missed...
So it's a 0% card then?0 -
Hi - yes, it appears that it was a massive mental shortcut by me and I didn't say it was a money transfer card. Like a balance transfer card and at 0% for 31 months; with a fee of 4%.* * * Catriona's Credit Card Countdown * * * from -£16k to debt neutraldom - for my debt diary click here
Barclaycard -£5,867.52;
mbna1 - 3,009.22
mbna2 - 1,755.70
Savings £5,017 MFiT #25 £2,627/£10k; daily interest £5.040
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