Interest Calculation Request

OhJustSomeGuy

Hello,

I have just received a Santander 15 months 0% Credit Card with a disappointing £4,400 limit. I plan to mule the £4,400 to my RateSetter account and lend it for the One Year term at an interest rate of 4.2%, and with my RateSetter account configured to lend the monthly repayments back out on the Monthly term at a rate of 3%.

I am a basic rate taxpayer and intend to make the 1% minimum repayments automatically to the credit card.

Is anyone far cleverer than I able to calculate how much profit this scenario could potentially make?

I appreciate that I might not be able to get these RateSetter rates immediately and may have to compromise or could of course find better rates become available now or later. But for ease of calculation please ignore these possibilities as I'm just looking for a guide price.

OhJustSomeGuy

Apologies - I've just noticed the Stoozing.com Calculator given in the top forum post.

It calculates £140.03, though it doesn't handle the fact the money I mule into RateSetter will be repaid to me monthly and I'll be muling these repayments back in at the monthly 3% rate until the final month when I'll be using it to repay the remainder of my outstanding credit card balance.

Any ideas how my RateSetter plan will affect the £140.03 prediction?

bsms1147

I thought the one year bond is paid back after one year, not monthly? That might impact payment schedules. Also how do you plan to get the money from the credit card to Ratesetter?

Back-of-napkin maths suggests your £140 would be about £122.

OhJustSomeGuy

I've started to slightly dislike the way my RateSetter loans are repaid to me in monthly instalments, as once I re-lend these smaller payments out they also get repaid to me in even smaller monthly instalments. I made a few five-year loans but it won't take too long until there's so many streams that it becomes a nightmare to get my head round. Also I don't trust the option to automatically reinvest at the market rate because the market rate fluctuates wildly, so I've ended up micro-managing the smaller repayments which means I've had money sitting in the account waiting to be re-lent and earning no interest (except for RateSetter) and become a little too obsessed frequently logging in to check current rates and my positions in the lending queue, then re-evaluate my target rate.

I'm pretty sure the one year P2P loans are no different; also repaid monthly.

I managed to get the Tesco CC offer as well, but it's still a lot less than I'd hoped for, less favourable terms, and I'm no longer comfortable with RateSetter so I've been reluctant to start Stoozing again.

Regarding your question about how to move the money, see the post "Tip - Use Barclaycard for back-door Super Balance Transfer !" by bargain slag.