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Should I take 0% money transfer on 1.9% fee

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Should I take 0% money transfer on 1.9% fee

edited 24 March at 2:49PM in Loans
4 replies 165 views
vic_msnvic_msn Forumite
19 posts
10 Posts
edited 24 March at 2:49PM in Loans
This months offer on one of my credit card is a 0% money transfer (for 15 months) to my bank account at a 1.9% transaction fee.
I have another personal loan which I am paying every month and looking to reduce my interest payments.
Is it a wise choice to get £2-2.5K on this card and pay into my loan account at a later date (6 months from now)?
I want to save £8-10K in the next 6 months to payoff my personal loan, so this additional £2K can help with closing the loan account.
Or plan to pay my savings and try to get a loan transfer at a better APR in 3-4 months.
I am not sure if I'll get this deal during that time?
I can also repay this £2K into the card within the 15 month period.
Thanks

Replies

  • sasha20sasha20 Forumite
    43 posts
    10 Posts Photogenic Name Dropper
    If the credit card money transfer option is cheaper than your loan rate (which it sounds like is the case) and you can repay the balance within the 15-month window, then you should absolutely do it - you'll save on the interest!

    However don't wait to pay - you don't have to pay the whole loan in one big payment. The moment that £2k or £2.5k lands in your bank account, pay it into the loan - the sooner you do it, the more money you'll save. There's no point it sitting in your current account not doing anything for 6 months!
  • lopsyfalopsyfa Forumite
    384 posts
    Third Anniversary 100 Posts
    ✭✭
    Do you have to wait 6 months to pay the money into the personal loan? I doubt there is anything stopping you from paying the 2-2.5k off the loan now and pay the remainder in 6 months. This way you minimise the interest payments and also reduce the temptation to spend the money transfer on something else and increase your total debt.
  • vic_msnvic_msn Forumite
    19 posts
    10 Posts
    lopsyfa said:
    Do you have to wait 6 months to pay the money into the personal loan? I doubt there is anything stopping you from paying the 2-2.5k off the loan now and pay the remainder in 6 months. This way you minimise the interest payments and also reduce the temptation to spend the money transfer on something else and increase your total debt.
    No, there is nothing stopping me from paying into the loan account, but my monthly loan payment remain the same.
    I already paid £6K into the account earlier this month which has brought down the tenure.

    Thanks
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