Two loans over to a 0% Credit card?

r6demon

Hello all, I am sorry that this appears to be my first post (and that its so long) but I have been reading through for the past couple of months and trying to get us debt free in the shortest possible time with the exception of the mortgage which is going to take some time, I have also tried to give all the details I can. Anyway.....

My wife and I have two loans, i was about to take out a better loan at 6.9% to pay them off (which I only did as they sent me a letter offering 4.1% and I now know what representative means!!) when someone suggested 0% credit cards.

I am just posting here to make sure that I am not about to make a Faux Pas as I have never done this before and do not want to get stung also I have managed to think about it for so long that I am now totally confused!!

Ok the loans...

One for a car (HP) with Honda Finance the details, are:

Start date: 28/03/2012 - ends 03/16
Duration 48 mths
Total Borrowed: £9835
Interest: 7.8%
Monthly payment £273.75

Having just requested a settlement figure its £4000

Loan two with AA Personal finance (which i think at the time was financed by Lloyds)

Start date: 20/10/2008 - Ends 10/2015
Duration 86 mths
Total Borrowed: £20,000 (gulp!)
Interest: 7.75%
£310.47

Settlement figure is £4346.58


So that gives me a £8346.58 Total debt on the two loans.

And a total monthly payment of £584.22

I have a standard 18.x% Lloyds Duo AMEX + Mastercard credit card which is empty with a £15,000 limit (has been dormant for 8 years but just received new cards etc.)

They are offering 0% for 6 months with a 3% charge.


And I have an empty barclay card with a £9020 limit which is offering

0% on balance transfers with a
2.9% charge
until November 2015

which would allow a maximum of £8118 maximum transfer to include the 2.9% (I have no idea how that works as 2.9% of £8346.58 is £242.05 isn't it?)

OR 3.9% to June 2016 But that would reduce the amount I can transfer.

The hope was to keep the monthly payment about the same around £600 a month.


My plan was to pay both loans off with the Lloyds card putting a balance of £8346.58 on the Lloyds cards and then transferring that balance in one go to Barclay card to get the 0% offer.

My questions were:

a) Will i get charged for paying the Loans off slightly early or do I need to make 2 payments on each and not a lump sum or can some one advise as to what I can do to save the most money?

b) Is this the way to do it (I was thinking that if I used the Amex I could also get points if they accept it of course?)

or C) Should I just take the £9000 loan for 6.9% for 18 months which is £9484.20 total with a monthly payment of £526.90 (I think?)

D) Wait until Jan and see if the banks offer any better deals (But my loan application would have expired as I only have 28 days from 04/12 when I made the application!)




I have run through this so many times that I am totally CONFUSED!!!!

[Deleted User]

The first thing to check is whether the loan companies will accept card payments.

Paully232000

I think the first issue you may have, although do check, is do the loan companies allow you to pay them off with credit cards.
If not then this is a non-starter and you would have to get a money transfer CC with enough of a limit and obviously get accepted.

YorkshireBoy

r6demon wrote: »

which would allow a maximum of £8118 maximum transfer to include the 2.9% (I have no idea how that works as 2.9% of £8346.58 is £242.05 isn't it?)

Barclaycard usually have a 90% of your limit rule for BTs, and 90% of £9,020 is £8,118.


MBNA might be an option for a money transfer. Around 2.5 years 0% for a 2.xx% fee. And because you've two loans, if the limit isn't as large as you'd like at least you might be able to get one of them onto 0%.


You say you'd like to keep the payments at £600 a month? Then don't fall into the minimum payment trap, because with MBNA in a 0% period it's 1% of the balance per month, ie £83 initially on an £8,300 balance.

r6demon

YorkshireBoy wrote: »

You say you'd like to keep the payments at £600 a month? Then don't fall into the minimum payment trap, because with MBNA in a 0% period it's 1% of the balance per month, ie £83 initially on an £8,300 balance.

Are you saying that if I pay more than the minimum payment that the 0% rule is void?

ie I MUST ONLY pay the minimum payment?

When does the rest get paid? At the and??

r6demon

Paully232000 wrote: »

I think the first issue you may have, although do check, is do the loan companies allow you to pay them off with credit cards.
If not then this is a non-starter and you would have to get a money transfer CC with enough of a limit and obviously get accepted.

REALLY?? I didn't even imagine that would be an issue!?? I will check now!

r6demon

YorkshireBoy wrote: »

Barclaycard usually have a 90% of your limit rule for BTs, and 90% of £9,020 is £8,118.

This was the Limits that barclay card gave me:


New limit £9020 - £8118 max transfer

r6demon

OK - I just checked and got the following information:


AA Loan £4346.58 left on loan at 7.75%

Will only accept bank transfers NO CARDS!!

£126 saving to pay off now excluding info below

£4226.70 - settlement figure to end Dec inc 58 days interest on the final payment if shortening the term!!



So if I pay the loan off in two instalments of say £4220.70 and then £6 I would only pay the 58 days interest on the £6 apparently?

Would this have to be over 2 months? So make a bulk payment now and leave £6 on the loan for the final automatic payment which will incur the 58 days interest?

Well that kills the Credit card option on that loan!

YorkshireBoy

r6demon wrote: »

Are you saying that if I pay more than the minimum payment that the 0% rule is void?

ie I MUST ONLY pay the minimum payment?

No, I'm saying exactly the opposite! DO NOT make only the minimum payment*. Continue with your £600 a month approach.

When does the rest get paid? At the and??

You can pay as much as you like, provided that you make at least the minimum payment.


* Unless you're disciplined enough to save the rest in a savings account, ie £83 to MBNA and £517 to a savings account. Use the savings account balance to repay the debt at the end of the 2.5 years and the interest earned is a little bonus for you.

YorkshireBoy

r6demon wrote: »

This was the Limits that barclay card gave me:


New limit £9020 - £8118 max transfer

I know...you said earlier. I was telling you 'why' the numbers didn't tally with what you thought, ie their 90% rule.

r6demon

YorkshireBoy wrote: »

No, I'm saying exactly the opposite! DO NOT make only the minimum payment*. Continue with your £600 a month approach.You can pay as much as you like, provided that you make at least the minimum payment.

FEW!! As that was what I had thought and was starting to wonder if I had got it all wrong.

You MUST make at least the minimum payment but over pay to your hearts content!

Now for my new dilemmas above