Sanity Check

lewishardwick

Hi all,

I have a Lloyds Online Exclusive loan with approx 19 months left on a remainder for £4,500. I pay about £270 per month. APR 10.9%.

A few weeks ago, I got a a letter offering cash advances on my Lloyds Credit Card at a fixed 4.9% APR.

This would suggest that taking a cash advance to settle the loan would be the sensible option. Then keep the repayment the same to reduce the term/interest.

Given Lloyds 'fine'/'charge' two months interest for early repayment, is this still worth doing?

This is the last unsecured debt I have and am keen to clear it ASAP.

Am I missing anything?

[Deleted User]

It will be probably worth it, but it depends on how long you will take to settle it.

Check if there is also a cash fee to factor in.

Lastly, will you clear it before the debt goes to your standard APR?

System

lewishardwick wrote: »

This is the last unsecured debt I have and am keen to clear it ASAP.

Am I missing anything?

Paying it with the cash advance from the credit card doesn't clear it but merely shifts it. As for whether it is worth it just run the numbers. Be aware though not to do any further spending on that card.

Herzlos

It'd work if you can be sure you'll maintain the payments - minimum payments on the credit card will be 1% of the balance + interest, so will go down every month (meaning you'll never quite clear it on minimum payments).

Xbigman

The trick with Lloyds loans is to pay off most of the loan and let the last one or two payments go through normally, thus eliminating any early repayment charges.



Darren

MallyGirl

also be aware that cash advances on credit cards are not always looked on favourably by potential new lenders - if you are planning further borrowing in the near future then I would exercise caution

Penelopa.Pitstop

Make sure you don't ask for settlement at Lloyds, because if you ask, whatever you pay within 30 days since quote, will incur early repayment charge. So just pay most of the loan, but not everything. Let the last payment to be taken by direct debit.

And check all fees on credit card offer. It's probably balance (money) transfer to account offer. MBNA is offering similar transfers.