Advice please to let me know if this is a stupid plan to transfer a loan to 0% cc

Dalek01

I currently have £5617.47 left on a Tesco personal loan (3.2511%) which is due to finish in August 2024. It was originally taken out in April 2017 - £15,000 with £2032.55 interest. I made a small lump sum overpayment in 2020 which is why I only have the above balance left - I received an interest rebate of approx £170. (My current repayment is £179.29 per month).

I want this gone before August 2024 and can afford to overpay. This is my plan; please tell me if I'm being daft.

Money transfer from a current Halifax cc (zero bal) - £4800 - no fee to transfer but there is interest of 3.9% pa
Straight away I will transfer this new balance to a NatWest cc 0% for 20months so I don't pay much of the Halifax interest above (I can happily pay the £240 pm needed to clear). This would be a new cc which I have been pre-approved for and I would only apply for it if my plan was going to work.

This would leave the original Tesco loan with a balance of £817.47 which would, hopefully, reduce by approx £600 (due to interest rebate) and leave me with a small balance to clear.

I'd be grateful for any thoughts and whether my sums look completely wrong.

maas

I can't speak about your figures as I probably need more info on the dates of overpayments, overpayment charges etc etc - but I am just in the process of doing a similar thing.

Money Transfer no fee with 3.9% APR and then just transferring it over to a BT card (again no fee). I should only have to pay a few days interest on the MT transfer, and so essentially getting almost free credit.

The only snag is getting the limit you want on your BT card, but if you don't get the amount you want (4.8k) then you just do it with whatever they offer.

molerat

Seems an OK plan providing you can get the new card.  What is the limit on the existing Halifax as you will only be able to MT 90-95% of the limit.

MattMattMattUK

The first issue may be getting the Balance Transfer Card, the second issue might be Halifax approving the money transfer for £4,800, the third issue might be the new BT card approving the balance transfer for the whole amount.

In theory it works, but that unfortunately does not always mean it will.

Jami74

I did something similar a couple of years ago. Money transfer with no fee (paid less than £1 interest), then balance transfer no fee and 0% interest.

Just bare in mind that until your loan is paid off you will pay loan and credit card each month and don't do the first transfer until you are ready to do the balance transfer. If the Natwest card has a high enough limit you could money transfer and balance transfer twice.

Dalek01

My Halifax limit is £6,500; it already said they would give me 93% of that for a money transfer.  The biggest stumbling block would be the application for the NatWest cc with the 20 mth BT offer but I'm pre-approved (I presume that definitely means I'll be offered it?)
Tesco told me today that my loan settlement figure is £5418.16!!

jay1804

Santander have 18 month 0% interest/fee and their eligibility checker gives you your an estimated credit limit.

Jami74

Dalek01 said:

My Halifax limit is £6,500; it already said they would give me 93% of that for a money transfer.  The biggest stumbling block would be the application for the NatWest cc with the 20 mth BT offer but I'm pre-approved (I presume that definitely means I'll be offered it?)
Tesco told me today that my loan settlement figure is £5418.16!!

Very exciting. Good luck with the Natwest application/credit limit. Just a heads up that £240 a month will not clear £5400 in 20 months, although would leave you with less than £1k.

Dalek01

Thanks. The £240 a month is based on the £4,800 balance transfer I plan to make. I'm expecting I'll have to make a couple of normal monthly payments to the Tesco loan as well as the cc.

Good news: I've been accepted for the Natwest cc and my credit limit is big enough to make the transfer. I'm just going to wait until I get the card number before I make the transfer to Halifax from Tesco.

MattMattMattUK

Dalek01 said:

My Halifax limit is £6,500; it already said they would give me 93% of that for a money transfer.

It still does not mean that they will approve it at the point you apply for the transfer.

Dalek01 said:

The biggest stumbling block would be the application for the NatWest cc with the 20 mth BT offer but I'm pre-approved (I presume that definitely means I'll be offered it?)

Pre-approved means almost nothing, it means that based in the info you put in they are willing to offer you the card, pending full evolution and a credit check. It also does says nothing about how much credit they will give you or what threshold they would allow as a balance transfer. 

Dalek01 said:

Tesco told me today that my loan settlement figure is £5418.16!!

You have a figure, so you can work to that. Just make sure you have a backup plan for if one part in the chain breaks after you have already started.