pay off loan with cc transfer to current account?

plzhelpmesave!

Hi
We have a £15k loan with co op taken out 12 montgs ago for 5 years ar around £250 a month.
Have been offered a 0% BT ftom mbna that is also 0% if transferred to currrent account.

Does it make sense to do that and pay loan off early as at 8.9% interest or will loan amount not change?

Thanks!

forgotmyname

£250 a month over 60 months is £15,000 so your not paying interest anyway?

How long is the 0% period? How long will it take you to clear the balance? Whats the interest rate after the 0%?

thebritishbloke

forgotmyname wrote: »

£250 a month over 60 months is £15,000 so your not paying interest anyway?

How long is the 0% period? How long will it take you to clear the balance? Whats the interest rate after the 0%?

I'm also quite confused...

If your deal with your CC is for less than 30 months, I wouldn't bother with it. You need to also make sure you're actually going to be able to afford the repayments on the credit card. Remember that the transfer to your current account will carry a fee.

You will save interest if you pay off a loan early, but it needs to be feasible for you to do so.

YorkshireBoy

£15K over 60 months at 8.9% APR costs around £310 a month.


So far you've paid off 12 x £310 = £3,720 and still owe around £12.5K


A £12.5K money transfer will cost (at 4%) £500 with MBNA and their 32 month card, so you now owe £13K at 0%.


In 32 months you'll have repaid 32 x £310 = £9,920, so now owe £3,080


If you can BT this debt to another card (for a 3% fee) you'll owe £3,172


Continuing to pay £310 a month you'll have it cleared in 11 months.


So you'll repay it in 43 months (5 months early) and have paid £592 in fees...much less than you'd have paid in loan interest over the same period, because according to www.whatsthecost.com you'd have paid a total of over £3,600 interest over the original 5 year term. Most of it will occur in the early months, but I reckon you'll still save £1,500 to £2K.


Hope I haven't wasted my time with the above though, because, as others have said, your numbers don't add up!