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Loan over credit card debt

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Loan over credit card debt

3 replies 161 views
JessCM9JessCM9 Forumite
3 posts
First Anniversary
MoneySaving Newbie
I currently have a loan I'm paying off and was wondering if it might be a good idea to increase the loan, clear my credit card debt and then just continue to pay off the loan only?

Replies

  • zx81zx81 Forumite
    26.8K posts
    Ninth Anniversary 10,000 Posts Photogenic Name Dropper
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    It doesn't matter. What matters is the relative cost of each.
    Go for the lowest rate option and pay as much as you can towards it.
  • Willing2LearnWilling2Learn Forumite
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    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
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    JessCM9 said:
    I currently have a loan I'm paying off and was wondering if it might be a good idea to increase the loan, clear my credit card debt and then just continue to pay off the loan only?
    How much do you owe on the card?  Have you tried an eligibility checker for a card with a Balance Transfer 0% APR promotion?
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • lopsyfalopsyfa Forumite
    320 posts
    Third Anniversary 100 Posts
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    It depends on what the current APR on the credit card is and the rate of the loan. If the CC is currently 0%, it doesn't make sense to get a loan to pay it off. Just budget to pay off the credit card before the 0% offer ends or try to shift to another 0%.

    Even if the credit card is not on 0%, you need to be very disciplined for this to work because the temptation is that you will shift the debt to the loan and then just keep spending on the now available amount on the credit card. Better to just close the credit card account .

    The best way is usually to cut down on everything and throw any spare cash on the highest rate debt. Goodluck
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