Credit card or loan to pay family member loan

ODD1991

Hi guys,

Apologise if this has been asked before. Basically I owe my mother around £4000 for a loan she gave to buy a car a few years ago. Shes looking to give up work so I said i would be willing to pay her back in full instead of direct debit etc.

I have done some research but still struggling to determine the best method.

Would a personal loan or a credit card would be the best option. Repayments shouldn't be a problem and have a good credit rating.

Many thanks in advance

[Deleted User]

It's unlikely your mother accepts credit cards.

It's possible you could get a money transfer card but it depends on how long you will take to pay it off.

ODD1991

Thanks for the reply. I was looking to give it via bank transfer so would i money transfer card work for this. I could pay it off within the two yeas as i have seen cards with 0% for 24 months.

[Deleted User]

It would probably be the cheapest option, even with the 4% ish fee.

ODD1991

So if I get £4000 limit, I could transfer that over to my mothers account, set up direct debit to pay the minimum payments and I wouldn't pay interest. what im not quite understanding is the fees involved.

[Deleted User]

Correct. Although you'll need to pay more than min payments to clear within two years.

There'll be a fee of around 4 % of the total for you to transfer the money into your account. So around £160.

Have a read of the key information so that you know exactly what you're getting into, an an idea of the rate that it will go to after the 0% period.

[simon]

ODD1991 wrote: »

Thanks for the reply. I was looking to give it via bank transfer so would i money transfer card work for this. I could pay it off within the two yeas as i have seen cards with 0% for 24 months.

0% on what for 24 months?

0% on balance transfer ?

Or

0% ( interest free )

If its interest free , you will have a fee to pay for the balance transfer but no fee to pay on the loan amount for 24 months as long as you pay the minimum amount each month

Dan83

Get a balance transfare card and another card, transfare £4000 from the balance transfare card to the other card, then transfare the positive balance into your bank. Read through the forum there is s few threads about this and tell you which companies will let you transfare a positive balance off a card

ODD1991

Thanks both, on here i seen a MBNA card with 36 months 0%, 2.99% fee and 18.9% APR. does this mean that i will pay a fee of 2.99% of £4000 transferred and then the 18.9% will only come into play if the balance is not paid within the 36 months?

Dan83

If you pick the right cards, there will be no fee

swindiff

Depending on how its done it is possible to do this without incurring any fees at all, I have done it myself.

Halifax's Clarity credit card allows you to transfer money into your Halifax current account completely free of charge. You just start paying interest from the date of the transfer.

You can get a 23 month 0% interest with no transfer fee card from Tesco. Set up the balance transfer (which takes a few days) and withdraw the money from the Clarity card into your current account. You then have 23 months to pay off the £4k with no interest and no fees. Totally free borrowing if timed right