Pay off loan with credit card

bev2951

I took out a loan of £500 with 272.2% APR which means I pay back £910 over 12mths ,would be better to pay that off with credit card of 29% apr over same 12mths, bringing my monthly payments down to £40 instead of £80.
Thanks for any help.

Paully232000

The first problem you may have is whether the loan company will allow you to pay it with a CC.
If not then you need a CC which allows money transfers to a bank account, and then with the money, pay the loan off.

bev2951

Taking that they will,, is it more prudent to do this?

Paully232000

I have a feeling that Provident don't allow CC payments, only debit card.

But, if I am wrong, or it isn't provident, and the company do, then it would be wise to pay it off with a CC as the interest on the CC you state is going to be less.

bev2951

Thanks for advice.
Yes it is Provident (wondering how you knew that ?)
If they dont accept CC could I withdraw cash on CC and pay it off that way.

Herzlos

Yeah at that rate you are still going to be better off drawing cash (normally about 3% charge + whatever APR from the day you withdraw it).

Edit: or buy stuff you'd normally pay for with cash/debit using the credit card and use the cash to pay off the loan. Might take you a while to transfer the £500 over though but will still save you money.

Paully232000

Yes, I wouldn't normally say that withdrawing cash from a CC is a good idea, but even if you did, I would suspect that the interest rate for cash advances, plus fee for taking money out is going to cost you less over the year than the loan.

and the interest rate you quoted gave it away:)

before you do anything I would phone provident and ask them how much it will cost to pay off early, and see how much they quote you.