Paying off a loan with a credit card. Is it worth it?

paulagm22

So a few months ago I purchased a new car and took out a small loan of £4800. Each month I'm paying off £200 for the next 28 months (or around abouts). I was wondering if it would be a better option for me to take out a credit card and pay off the loan that way. Saves me having to pay interest on the loan and a stupid final repayment of about £350.

I know very little about credit cards so some advice of what cards would be best suit me would be great.

[Deleted User]

Depends on the interest rates of the loan and the cards. You probably don't want to end up with a large debt at the go to rate on a credit card.

CLAPTON

paulagm22 wrote: »

So a few months ago I purchased a new car and took out a small loan of £4800. Each month I'm paying off £200 for the next 28 months (or around abouts). I was wondering if it would be a better option for me to take out a credit card and pay off the loan that way. Saves me having to pay interest on the loan and a stupid final repayment of about £350.

I know very little about credit cards so some advice of what cards would be best suit me would be great.

depends


how much interest are you paying on your loan?
what is the APR?
why is the 350 'stupid' and why are you paying it?

paulagm22

CLAPTON wrote: »

depends


how much interest are you paying on your loan?
what is the APR?
why is the 350 'stupid' and why are you paying it?

I dont have the details in front of me annoyingly

but I'm pretty sure APR is around 22%

the £350 is just a cheeky final repayment fee

CLAPTON

what are the terms about repaying early : you need a settlement figure
will the loan company allow the debt to be settled by CC?

will you be able to get a suitable credit card e.g. a 0% purchase card for sufficient time for you to clear it before the 0% runs out

Foxy-Stoat_3

You will need a credit card that does super balance transfers, Barclay Card and Virgin do them.

As said, the limits need to be high enough to clear the loan and you will have to make high enough payments to clear the balance before the 0% interest runs out AND make sure you do not spend on the card during that time AND never miss a payment.

Other than that, your plans are sound and it will save you money.

grumbler

paulagm22 wrote: »

... Saves me having to pay ....a stupid final repayment of about £350.

paulagm22 wrote: »

the £350 is just a cheeky final repayment fee

How can you avoid paying it then?

TBeckett100

22% apr sounds like you may be a credit risk. Not sure you'd get much of a credit limit with a mainstream provider