Money Transfer to pay off 'Graduate Loan'?

XboxFan89

Hi all,

Hopefully a quick question... I currently have a credit card with Lloyds with 4400 limit (Nil balance currently) and a £2915 (as of right now) Graduate Loan at 12.6% APR with Lloyds with 13 monthly payments of £250 to go.

Slowly been chipping away at it all and now that £2915 is literally the only thing I owe and I can easily manage to pay that £250 a month - however I just got an offer from Lloyds offering me a 0% Money Transfer from my credit card to bank for 23 months and 3% fee.

Is it a good idea to actually request a £3000 money transfer into my bank account (with Halifax) and actually just use that to pay off my loan in full... and just repay that 250 to my credit card instead? As both loan and credit card are with Lloyds I'm not sure if they would put 2 and 2 together and figure out I'd be paying off the loan and therefore not allow it, but surely I would save money and only have to pay the 3% fee. Any thoughts on this? Has anyone else done this?

If not a good idea, no harm I'll just continue to pay it off for the next 13 months inc interest. I can pay it off early I believe and I assume not pay all the interest as there is a calculator on the site that says how much interest I would save if I paid X extra for example.

Thanks!

[Deleted User]

Yes, you can do that.

XboxFan89

Awesome, so the only thing I'm a little worried about is when they ask what do I want the money for... would they decline if I said "to pay off a loan"? Or if I said to make some other big purchase, but then I go and pay of the loan (which is with them too) they again see what I've done and either request I pay it back or make it 23% APR which is the credit card?

[Deleted User]

When you pay off the loan, they're not going to say 'hang on, these £10 notes look like the ones we put in your account last week'.

If they ask what the borrowing is for, they have the right to decline, but I can't tell you their specific criteria or what they may decline on.

DCFC79

Why not just be honest with them but you won't know until you apply.

XboxFan89

I guess it can't hurt!

I'm now just trying to work out if it is better off overall though even though I'm thinking surely it would be...

13 x 250 = £3250

It quoted me £2990 to close the loan then add an extra £90 for the 3% so it's a total £3080, so technically saving £170. I guess every little helps.

The odd thing is using the calculator if I paid off a sum of £2500, then another £415... it doesn't mention the extra up to £2990. *sigh* May just leave it as is and pay extra when I can!

jonesMUFCforever

Can you not just overpay the graduate loan?
This will save you the money transfer fee and the interest you will pay on the remaining balance.