Personal Loan repayment thoughts 8 July 2022 at 3:48PM in Loans 4 replies 305 views

Montoyaclan

Transferring personal loan to credit card

So I just took out a personal loan of 12000 at 11.3%. The first payment is not due until July 30th. A credit card that I have has just offered me a balance transfer of 5.8% and that rate stays until the balance is paid off. Meaning there is no time limit to have it paid. The fee is only 2%. Obviously, I pretty much know my answer is that it is a smart move. My main question is how to personal loan companies look at this (in this case Goldman Sachs) if the loan is paid off before the first payment?

 

Thank you

[Deleted User]

You won't be able to use the balance transfer to pay it off. 

You'll need to either find a money transfer card, another loan or pay it off from savings.

Lenders will see that the loan is settled, but also the corresponding increase in debt elsewhere if you use credit, so it will make little difference to your risk.

Sandtree

You cannot BT to a loan so either you need a mechanism to cash out or need a different card that allows money transfers.

If you got the loan within 14 days then it'd be better to cancel the loan in the cooling off period and avoid the penalty interest for early settlement but if you are beyond that then the loan company wont care and you just need the early settlement figure to cover the penalty for early settlement (normally 1 months interest)

[Deleted User]

The only way to use the BT card would be to use a normal card to buy everything you need on CC and BT over the balance while using the money you would have used on the purchases to go towards the loan, perhaps even advance payment of some things you can store that you would need

Montoyaclan

Good points all. I sent a message to my credit card company just out of curiosity to see what they say.