Help with 6.1% loan onto 0% credit card

longwalks1

I took out a loan with M&S bank 2 years ago (opened on 21 May 16 over 72 months) for £12,000, at 6.3% APR. I currently pay back £200 per month. (dont know outstanding balance off top of my head)



I've been offered a 0% BT credit card from Lloyds (who i bank with) for 32 months at 1.4% transfer fee, is it worth me applying for the CC and paying off the loan?

eskbanker

A balance transfer doesn't help in paying off a loan as BTs are only for transferring balances from one credit card to another.

If M&S allow loan repayments by CC then you could do that (with a separate card) and then transfer the balance to Lloyds, or otherwise look at money transfer cards, which would allow you to pay the money into your bank account (and then from there to M&S): https://www.moneysavingexpert.com/credit-cards/money-transfers/

Obviously all of the above is conditional on securing a high enough credit limit in each case....

TadleyBaggie

Balance transfer is for credit card to credit card transfer, it's unlikely that M&S will allow it. You would need a card with a money transfer option.

longwalks1

Ahhh OK thanks people, hadnt even thought of that. I'll take a look at the link Eskbanker and look into a money transfer card


Thanks both of you

foxy-stoat

My Lloyds card has a money transfer option - if you can pay it all down within the intro period then go for it, or get another BT card and do the shuffle thing for a few years.

sparkey1

Yes, but M&S Money is HSBC, and the way they work for loans is that you ring them up and get a settlement figure, and then pay that in the timescale provided. Or you pay the full balance and they then refund you the interest that has been charged up front. Just something to bear in mind, unless cleared, they will continue to take the £200 per month, until cleared. They dont lower you payments.

longwalks1

sparkey1 wrote: »

Yes, but M&S Money is HSBC, and the way they work for loans is that you ring them up and get a settlement figure, and then pay that in the timescale provided. Or you pay the full balance and they then refund you the interest that has been charged up front. Just something to bear in mind, unless cleared, they will continue to take the £200 per month, until cleared. They dont lower you payments.

Interesting sparkey1, i did ask on here a few months ago if interest was added at the start of the loan, as with my calc it had been. So if i paid it all off, I'd pay the full amount (including the interest) and then possibly have to chase them for the refunded interest?

longwalks1

foxy-stoat wrote: »

My Lloyds card has a money transfer option - if you can pay it all down within the intro period then go for it, or get another BT card and do the shuffle thing for a few years.

Just had a look on Lloyds and couldnt see any offer of a money transfer card?



Even if i could, not sure how to work out the possible savings of closing my loan early with a payment from a mone transfer against the money transfer fee

[Deleted User]

britishboy wrote: »

So if i paid it all off, I'd pay the full amount (including the interest) and then possibly have to chase them for the refunded interest?

No. You'd pay the settlement figure, which would account for the saving on interest.

britishboy wrote: »

Just had a look on Lloyds and couldnt see any offer of a money transfer card?

It's an offer for existing customers only.

foxy-stoat

britishboy wrote: »

Just had a look on Lloyds and couldnt see any offer of a money transfer card?



Even if i could, not sure how to work out the possible savings of closing my loan early with a payment from a mone transfer against the money transfer fee

3% fee and you have to pay it down over 24 months.

On £10K, £300 fee pay £430 a month and your clear in 2 years - or do another shuffle and pay another fee every 2 years.

I would just overpay your current loan - 6% isnt too bad really.

redux

foxy-stoat wrote: »

3% fee and you have to pay it down over 24 months.

On £10K, £300 fee pay £430 a month and your clear in 2 years - or do another shuffle and pay another fee every 2 years.

I would just overpay your current loan - 6% isnt too bad really.

The current loan balance would be about £8178

Speeding up loan repayments to 2 years would be £547 interest (compared to £1048 on remaining 46 months), versus £250 transfer fee to the card

If there's any chance that repaying in 2 years is a bit tight on time, the transfer to a card is a bit risky, unless following up with another transfer. But a second transfer then with a 3% fee for say only a year doesnt work out cheaper than having stayed with the original loan.

So it might be worth hedging with a split, considering one transfer now to cover for about half to two-thirds the loan.

Or find transfer arrangements with lower fee than 3%