Looking for advice on clearing Santader car loan

SignsOfMadness

Hi there,

Over the last 4 years or so I've made every effort to become debt free, have cleared credit card debts, a couple of personal loans from savings and have paid of my mortgage. Currently only have one major debt left which I'd like some adivice on how to clear it as quickly and cheaply as possible.

It's a car loan from Santander which has 28 months left to run @£214.30 and a one-off admin fee of £189.40 a total of £6189.40.

I have a quote from Santander to clear it by 23rd March of £5617.66 so I would save £571.74 by clearing the debt now.

I have a Bak of Scotland credit card with £8100 limit and clear total balance every month. I had looked at this as a way to clear the loan but the interest and transfer fees negate any saving. In addition to that I don't think I can make a credit card payment to Santander.

Should I be looking for a low rate loan for £5600 or somethinh else? I also recall a 0% credit card which I can use to pay money into my bank (and consequently pay Santader) but can't seem to find one.

Advice appreciated.

John.

Ebe_Scrooge

You can't use a normal credit card to pay off a loan. What may be a possibility is a "money transfer" card - these are similar to balance transfer cards, except they deposit money into your bank account, and you then pay the balance off the credit card. Whether you'll be accepted for one, and whether you'll be given a high enough limit, is down to the lender's criteria, but you generally need to have a very good credit history to be considered for one of these. And don't forget there's usually a balance transfer fee to factor in.

If you look at the Credit Cards section of the main MSE site you'll find all the information and links to the best cards.

Another loan to pay off this one - it's a possibility, but you'll need to look at the APRs of both and see if it'll be worth it. Also, a lot of lenders are reluctant to give loans for this type of thing - their view being that you'll not use the new loan to pay off the old one, and end up overstretching yourself.

I'd suggest heading over to the Credit Cards section, check the eligibility calculator to give you an idea ( though it's by no means 100% accurate ) and take it from there.

Mahsroh

If you simply want to pay it off ASAP but don't have the cash to settle the total balance now can you not just overpay as much as possible? If you can afford it pay £100 or £150 extra each month. You clearly wont save the total £570 that you would if you paid it off now, but if would certainly reduce your overall interest.

SignsOfMadness

Thanks for the advice guys. Just applied online for the Virgin balance transfer card. Got £6800 credit limit, 1.69% transfer and 0% for 32 months.

With a transfer fee of £94.94 I now have a total debt of £5712.34 so saved myself £477 in interest. can also choose to overpay as and when I can to reduce time.

Made up. Thanks again.

John

Mahsroh

Excellent! good work!