Balance Transfer Question.

mayrp2001

Hi,

I am somewhat new to a lot of this and I just had a quick question that I was hoping to get some help with.

I am currently paying of a Co Operative Professional and Career development loan, with an interest rate of 9.9%. My question is, can I use a one of the current balance transfer offers to make it cheaper to pay this loan off? or do balance transfers need to be credit card debt?

Thanks for the help.

Ryan

MadProf

Hello Ryan,

Balance transfers only allow settling other CC debts, not loans or overdrafts. If you want to move this debt to 0% interest, what you're looking for is a credit card that offers a money transfer.

Depending on your credit rating, you could get 0% interest up to 32 months (MBNA Platinum) for a 4% handling fee or if you can repay the debt faster you're better of looking for a shorter term as lenders will typically offer lower fees. Other providers worth looking into are Virgin Money and Barclaycard (if you hold one in good standing you may periodically be offered money transfers).

Be warned that you may not get the limit you would require to settle your debt in full but even then you can still save significantly on interest payments by making an overpayment of up to 90% of the limit of your newly issued money transfer credit card (check with your loan provider if this is allowed and what fees/penalties you'll incur if you do so).

Should the handling fee end up costing more than the interest you would have paid on your loan (and it shouldn't be at 9.9%) then there's really no need to bother.

Hope this helps!

mayrp2001

Thats great. That helped me out a lot.

Thanks for the reply.

Ryan