Using Balance Transfer 0% interest CC to pay off personal loan

FlossieFlump

I have a small personal loan with Santander, £2,600 at the moment with left 2yrs to run. I can easily pay the repayments at the moment. I don't want to use my meagre savings to pay it off as they are for emergencies only.

I have a new Barclay Card Platinum CC 0% interest for 20 months on balance transfers and 23 months on purchases. I applied for this particular card mainly for purchases for 23 months with 0% interest as I have ongoing vet expenses for a terminally ill pet and the pet insurance company are taking between 6 and 8 weeks to settle each monthly claim. The pet's life expectancy is at best only 18-24 months as the condition is terminal. 

Back to the personal loan. I wondered if I could get a 0% interest credit card with a 32 month or 23 month period. I will probably pay off more than the minimum repayment each month as it would be a lot less than I'm paying now.  I could save about £400-£600 by doing this.

But most cards I've looked in to won't allow you to pay off a personal loan with their balance transfer cards and the money transfer cards would make me any better off or save me any money. 

Is there any way I can us a balance transfer card to pay off the personal loan? I've never delved into the mysteries of credit cards before, I do have a Santander basic credit card but rarely used. it.   I  have never used a balance transfer card before so any advice would be most welcome as I'm a total numpty with all this money wizardry. 

Nasqueron

You cannot pay a loan with a CC (even if you could it'll be a cash transaction with associated fees)

Look for a money transfer card - Barclays do offer this sometimes

TheSpectator

As above you would need a money transfer 0% card, but most of these come with a transfer fee between 3% and 5% so possibly wiping out some of your savings.

grumpy_codger

Use your 0% on purchases card wherever it's accepted and direct all 'saved' cash to paying off your loan.

BikingBud

If you have a 0% spending credit card doesn't this give the flex for any emergencies?

Are you looking to get another 0% card?

How much headroom do you have in your current card even taking into account expected vets bills and the delays?

If you pay off the loan from savings and have no emergencies you saved the interest on your loan?

If you do have emergencies do you have enough headroom to cover your exposure, ie the same as your savings pot?

If so you have still saved the interest on the loan and can spread the cost of the emergency over a period and pay no interest.

Did you ask for a settlement figure for the loan? How much could you save? Does it make it worthwhile?

I think it's just a cash flow planning issue and you could save the interest on the loan.

@Grumpy_chap mentioned divert living costs that are now being covered by your 0% card to pay off the loan early and then keep that rate up so that your savings pot grows to pay off your card upon closure of offer rate period.

Brie

I'd look at it from a different angle.  Use your savings to pay off the loan (assuming no early redemption charge or similar) and then because you don't have the monthly loan payments you can pop that amount back into your emergency fund saving account.  Maybe set up a regular saver and get a bit more interest on it.  

And if, in the meantime, you have an emergency you have the 0% CC to get you through.

BikingBud

Brie said:

I'd look at it from a different angle.  Use your savings to pay off the loan (assuming no early redemption charge or similar) and then because you don't have the monthly loan payments you can pop that amount back into your emergency fund saving account.  Maybe set up a regular saver and get a bit more interest on it.  

And if, in the meantime, you have an emergency you have the 0% CC to get you through.

Wish I'd though of that

DullGreyGuy

FlossieFlump said:

I have a small personal loan with Santander, £2,600 at the moment with left 2yrs to run. I can easily pay the repayments at the moment. I don't want to use my meagre savings to pay it off as they are for emergencies only.

I have a new Barclay Card Platinum CC 0% interest for 20 months on balance transfers and 23 months on purchases. I applied for this particular card mainly for purchases for 23 months with 0% interest as I have ongoing vet expenses for a terminally ill pet and the pet insurance company are taking between 6 and 8 weeks to settle each monthly claim. The pet's life expectancy is at best only 18-24 months as the condition is terminal. 

Back to the personal loan. I wondered if I could get a 0% interest credit card with a 32 month or 23 month period. I will probably pay off more than the minimum repayment each month as it would be a lot less than I'm paying now.  I could save about £400-£600 by doing this.

But most cards I've looked in to won't allow you to pay off a personal loan with their balance transfer cards and the money transfer cards would make me any better off or save me any money. 

Is there any way I can us a balance transfer card to pay off the personal loan? I've never delved into the mysteries of credit cards before, I do have a Santander basic credit card but rarely used. it.   I  have never used a balance transfer card before so any advice would be most welcome as I'm a total numpty with all this money wizardry. 

The legitimate mechanism is to put all your spending on to the CC and either use savings to pay off loan and use extra cash left due to spending on CC to replenish the savings or just do monthly over payments if you are that nervous around savings. 

A highly questionable mechanism is to use a highly trusted friend/relative or your own second PayPal account or equivalent to make a payment which you then put back into your bank account and then pay off the loan. In principle you could use Friends & Family therefore not incur any fees from PP but some have found F&F transactions being classified as cash so not in a promotional period; alternative put it through as a "purchase" and there will be a c3% transaction fee from PP.