Help with 6.1% loan onto 0% credit card

in Credit Cards
13 replies 1.6K views
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?
«1

Replies

  • eskbankereskbanker Forumite
    21.9K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Forumite
    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....
  • TadleyBaggieTadleyBaggie Forumite
    4.8K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    Forumite
    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.
  • longwalks1longwalks1 Forumite
    3.5K Posts
    Part of the Furniture 1,000 Posts
    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-stoatfoxy-stoat Forumite
    6.9K Posts
    Sixth Anniversary 1,000 Posts Name Dropper
    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.
  • sparkey1sparkey1 Forumite
    444 Posts
    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.
  • longwalks1longwalks1 Forumite
    3.5K Posts
    Part of the Furniture 1,000 Posts
    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?
  • longwalks1longwalks1 Forumite
    3.5K Posts
    Part of the Furniture 1,000 Posts
    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 :(
  • zx81zx81 Forumite
    35K Posts
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Forumite
    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-stoatfoxy-stoat Forumite
    6.9K Posts
    Sixth Anniversary 1,000 Posts Name Dropper
    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.
  • edited 9 August 2018 at 11:56AM
    reduxredux Forumite
    22.8K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    edited 9 August 2018 at 11:56AM
    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%
This discussion has been closed.
Latest MSE News and Guides

Gin, gee-gees & groceries

This week's MSE Forum highlights

Team Blog

2for1 adult tickets to theme parks

Via selected £1-£3 Kellogg's promo packs

MSE Deals