Which to pay off first?

[Deleted User]

BT-ing is fine, provided you're going to have the funds available, to clear it during the 0% period (£70 pm for an 18 month 0% APR), and the willpower not to drop down to minimum payments, a few months down the line.

Paying it off (and closing the account), means it's gone for good.

Sanctioned_Parts_List

fatbelly wrote: »

.. unless you can balance transfer to a 0% card

http://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards

An interest rate of 11.3% APR on the boiler sounds like one of those semi-flexible repayment plans Hitachi Capital and New Day tend to underwrite. Both are quite pleasant to deal with. (New Day bought almost all Santander's old consumer loans when Santander left that market a few years ago).

Anyway, the downside of those loans is that you cannot use a balance transfer credit card to pay the off directly. You can, however, use a 0% on purchases credit card to pay them off for a 2.5% handling fee*. Alternatively, you can get a money transfer card, transfer the money to your current account, then use that to pay off the balance by debit card for the 1.9% typical money transfer fee. The difference between the two fees is a princely £10.99. Note that money transfer cards tend to be rather harder to come by.

So to follow Fatbelly's post to its logical conclusion, the most efficient way of treating this debt in terms of interest and fees is to:

i) Pay £1000 off the credit card. That's a no-brainer.
ii) Use the eligibility calculator to see if OP's able to get a long 0% balance transfer card. The credit limit will need to be £2500 - £3000 depending on the CC's terms and conditions, and note the health warning below.
iii) Transfer the remaining £255 to the credit card for a 1.9% fee
iv) Pay the boiler loan for a 2.5% fee. (*Health warning: before you take the card, check very carefully that they'll honour this as a general purchase. Halifax and Barclaycard both did for me, but your mileage may vary).
v) The total debt including fees will now be £2137.65. Assuming a 32 month balance transfer card, this will be cleared with room to spare for £68.96 per month.