2 loans, 2 different interest rates, same bank.

JonnyKebab99
JonnyKebab99 Posts: 13 Forumite
First Post
edited 25 August 2024 at 9:18AM in Loans
As above, I have 2 loans outstanding with ZOPA. 

Loan A is 15% and has a settlement figure of £8.5k. Monthly payments for 2 more years is £440

Loan B is 11.9% and has a settlement figure of £3.5k. Monthly payments for 18 month is £210

Im in a position to do a balance transfer to pay off Loan B. 

Loan A, I can't pay it all off but could do a balance transfer of £3.5k towards it.

I've not found the chat in the bank app to be the best when asking 'if I pay x amount to Loan A, would my monthly payments come down or would the term reduce'

Question is, should I clear one just now or partially clear the other. It comes from the advice of paying higher interest loans first, which will possibly be the answer here too.

What would people on here suggest please 

Comments

  • Hi  :#

    Have I answered this myself, should I put what I can towards the larger loan rather than clear one altogether? 
  • Phoenix72
    Phoenix72 Posts: 425 Forumite
    100 Posts Name Dropper
    What do you mean by a 'balance transfer'? You normally can't balance transfer your loan to a credit card (or pay off a loan using your credit card). Unless you mean a money transfer card option where you transfer the money to your bank account and then use that to pay off the loan.

    You need to read the T&C' s to see how overpayments would be dealt with.
  • Dave_5150
    Dave_5150 Posts: 269 Forumite
    Fourth Anniversary 100 Posts
    What are your plans for clearing the 'balance transfer' before the interest kicks in? Especially if your existing lender chooses to reduce your loan term rather than the monthly payment.
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