Consolidate/pay off debt

Likesadeal123

Hello. I’m after some advice regarding my car loan and credit card debt please?
I have £11,000 left to pay off my car, which I’m currently paying at £500 a month, but also I have a credit card debt of £2500 at 0% until October. I have savings of around £7,000. I have the option of paying my car off early, so I’m thinking of doing a balance transfer on my CC and using the remaining allowance on the card, plus my savings,  to pay off my car loan. Does this sound like a reasonable thing to do? Am I missing any obvious/better ways of doing it?

Also, at the end of the year my mortgage deal comes to an end, so whatever I choose to do I don’t want it to negatively impact any potential new deal.

Thanks in advance!

QrizB

The devil's in the detail.

What interest rate is your car loan? What interest/fee on your money transfer (not balance transfer, unless you're transferring your current 0% £2500 to a new card)? What interest rate on your savings, and are they subject to tax?

surreysaver

I presume its a loan for your car that you want to pay off? If so, that's not a balance transfer. A balance transfer is when you pay off one credit card with another credit card.
Some credit cards let you do a money transfer - you do not say what credit card it is you have. But that will be a different thing to a balance transfer, so may or may not be available to you, and if it is available to you, may be at a different rate or promotional period than the balance transfer.

fatbelly

And this is definitely a personal loan than you used to buy the car? Not hire purchase/pcp/conditional sale?

Brie

Crucial thing is what is happening to the remaining debt on the credit card in October?  I'd be keeping my money safe to clear that assuming there's no further 0% offers to transfer that to.  Otherwise you're looking at 28% or similar.

Likesadeal123

Thanks for the replies. In my head I was thinking I would do a balance transfer to a new credit card, with long 0% and, minus my existing debt on the new card, still have enough credit left on it, plus my savings, to pay off the resettlement figure on my car finance. This is all assuming I could get a new card with a limit of £7,000ish and I am able to pay my resettlement with part cash (savings) and part credit card. Then I would be left with one debt on a new card that has a long 0% to pay back - lots of assumptions!

Apologies if I’m being naive, hence the need for advice.

DullGreyGuy

Likesadeal123 said:

I am able to pay my resettlement with part cash (savings) and part credit card. Then I would be left with one debt on a new card that has a long 0% to pay back - lots of assumptions!

Apologies if I’m being naive, hence the need for advice.

Have you checked if the car finance company takes credit cards? Many dont. Even if they do there is a reasonable prospect that the credit card company will treat it as a "cash like transaction" meaning you pay a fee for the payment plus start being charged interest instantly... in some cases it will be a higher interest rate than the standard for purchases. 

As others said, you are more likely looking at a card that has a money transfer offer on it which enables you to take the cash off the card and then pay the finance company. 

Jami74

If it was me I would pay off the credit card and put the remaining £4,500 to the car loan. 

Then, I'd see if I could get a money transfer card and a balance transfer to get the remaining £2500 loan paid off (assuming loan is accruing interest), but even without at £500 a month it would only take another five months.