Paying off Car Finance with Credit Card

lauralouuu

Hi all.

My OH took out car finance a few years ago to buy a car, but as his credit rating was so bad, the only one he could get had really high level of interest. Unfortuately he has little choice as his old car had failed its MOT and was going to cost a fortune to fix.

We rang the company to see how much the settlement fee would be and its £1000 less than what we would pay overall should we stay with them until the end of the 2 year period! So instead of paying back £4300, we could pay £3200!

I took out a 0% for 21 month credit card to pay it off but the company will not accept it, they said they cannot accept money from a third party and it must be a bank transfer. This seems crazy to me as what difference does it make to them where the money comes from?

But anyway, now we are a bit stuck. With the APR levels, there is no point in me taking out a loan as it would end up being about the same.

Has anyone got any bright ideas?

Thanks in advance!

forgotmyname

Can you make overpayments or save up and pay it off sooner?

Is it 0% on transfers only or spending also? If its spending then do all your shopping on the card and put that money away to pay off the loan.

But make sure you may slightly more than the minimum payment whilst your saving to pay the car off and then lots more than the minimum payment afterwards.

motorguy

lauralouuu wrote: »

Hi all.

My OH took out car finance a few years ago to buy a car, but as his credit rating was so bad, the only one he could get had really high level of interest. Unfortuately he has little choice as his old car had failed its MOT and was going to cost a fortune to fix.

We rang the company to see how much the settlement fee would be and its £1000 less than what we would pay overall should we stay with them until the end of the 2 year period! So instead of paying back £4300, we could pay £3200!

I took out a 0% for 21 month credit card to pay it off but the company will not accept it, they said they cannot accept money from a third party and it must be a bank transfer. This seems crazy to me as what difference does it make to them where the money comes from?

But anyway, now we are a bit stuck. With the APR levels, there is no point in me taking out a loan as it would end up being about the same.

Has anyone got any bright ideas?

Thanks in advance!

See how much it would cost to withdraw cash from the interest free card and then move the money over to the finance company.

The issue that the finance company have is that even though the card is "interest free" to you, they will still pay between 2% and 3% for accepting the transaction

facade

Read the very small print of that credit card deal.

0% rarely, if ever, applies to cash drawn out.

Foxy-Stoat_3

Get a card with Super Balance Transfer, Barclays and Virgin do these.

utopia_11

This thread might be best served over at the Loans forum board

Strider590

Sounds like craziness, taking a loan you can't afford, to buy car you can't afford and then juggling credit cards to solve the problem, it's classic "Robbing Peter to pay Paul".

There's always a choice, the choice was a cheaper car.

The solution is never to be found in borrowing more money.

Get out of this mess and take it as a learning experience, then hopefully live a happy debt free life.

motorguy

Strider590 wrote: »

Sounds like craziness, taking a loan you can't afford, to buy car you can't afford and then juggling credit cards to solve the problem, it's classic "Robbing Peter to pay Paul".

There's always a choice, the choice was a cheaper car.

The solution is never to be found in borrowing more money.

Get out of this mess and take it as a learning experience, then hopefully live a happy debt free life.

Attempting to put a high interest debt onto an interest free card makes sense to me?

Is that not one of the things this site recommends?

motorguy

Strider590 wrote: »

The solution is never to be found in borrowing more money.

Sorry but thats nonsense.

Firstly, the O/P isnt borrowing more money, they're moving the debt they had.

And secondly f i had a credit card with £1,000 debt on it at 29.9% APR, it would be far wiser to transfer that debt to an interest free card and pay the debt off over the interest free period.