Student loan and credit card balance transfer

Mrs_Chelle

Hi, I'm on have a student loan on plan 1 and as at today owe £6820.07. I borrowed 4k in 1999 and I'm making very slow progress paying it off.

I've considered paying it off with my Halifax credit card, then doing a balance transfer to my new HSBC 0% for 31 months credit card. Take the £200 ish fee and get the lot paid off in that time frame. 

However SLC will not accept a credit card payment, understandably.

Now I'm considering doing a cash transfer from my Halifax credit card to my current account. Pay off in full with my current account, then balance transfer to the 0% HSBC credit card as previously planned. I have two options with the cash transfer - one is 0% interest and incurs a 5% fee, the other is 5.9% p.a. with 0% fee.

If I go for the 5.9% pa with 0% fee option, there won't be any interest to pay because I'll immediately do the bank transfer. Am I correct?

I just want to run this past you all as I want to feel certain that I won't incur any fees / interest for doing this, and that I haven't missed something that will sting me.

I have no other debts and I am frugal.

I need rid of this SL.

Advice much appreciated.

CliveOfIndia

If I understand correctly, you want to do a Money Transfer from the Halifax card, use that to pay off the loan, then BT from the Halifax to HSBC?  And there's no fee for doing the BT from Halifax to HSBC?

If so, then it sounds like a plan.  Assuming, of course, that the Halifax card has a Money Transfer option available to you, which it sounds like it does.  And assuming that both cards have a credit limit sufficient to allow you to do the two transfers.

Mrs_Chelle said:

If I go for the 5.9% pa with 0% fee option, there won't be any interest to pay because I'll immediately do the bank transfer. Am I correct?

Presumably you mean you'll immediately do the Balance Transfer?  Depending on the precise timings, you might get hit with a couple of days of interest, but that'll be negligible.

I can't see any issues with this.  The usual caveat applies, of course - you must make sure you can repay the HSBC card in full when the 0% promotional rate expires.  You may be able to do another BT when the time comes, but you can't bank on being able to do so.

Mrs_Chelle

No there isnt a fee but there is interest - which i don't intend to pay because I'll will have transferred the balance to a 0% card.

I'm just scared to make the jump in case they hit me with something random and hidden, or if the banks kibosh it thinking its fraud since I never do anything financially dramatic.

Thanks for your reply 👍

QrizB

You can definitely take the money transfer and then transfer the balance to avoid all but a few days of interest.  I did the exactly same withy Halifax card a couple of months ago.

In my case I put the cash into a T212 cash ISA.

https://forums.moneysavingexpert.com/discussion/6614092/accelerating-my-stoozing

surreysaver

The danger would be if you couldn't pay the credit card off when the 0% expires, and you end up paying lots more interest than you would if you just left your student loan as is and didn't pay it off in one lump sum.
Once you've paid your student loan, you cannot turn the clock back and get that money back.
If you're confident you can pay off the 0% credit card by the time the 0% expires, then you should be fine.

[Deleted User]

Could you not save up the lump sum rather than borrowing? 

Repaying your student loan: Make extra repayments - GOV.UK

Mrs_Chelle

Hi Olenna,

I dont think I'd get there. By the time I'd saved up what I owe right now it'd be even more with interest. 

I want rid, and this way its feasible and can be done in 3 years or drag on forever. 

My concern with this method is the final part of doing the balance transfer. I can get the cash transfer to current account but then fear the new credit card will say no to the balance transfer because of some rule (that I can't find tbh) that i can only do balance transfers on credit that I've used to purchase things, and not on something like cash advances or cash transfers.

This is just an example, but want to pre-empt anything via you guys so I dont wind up screwing myself.  I dont want to be scuppered at that final point because there will very much be difficulties if I a) have to pay it all upfront or b) have to pay credit card interest which is ofc worse than slc interest.

Once I've gone ahead and paid the loan there's no going back. I suppose I was looking for someone to say "you can't do that cos of x,y,z" or "I've done that and its sound"

Mrs_Chelle

Just FYI in case anyone is interested in doing this themselves. I did a cash transfer to my current account using old credit card. There was £200 fee for this.  I then did a balance transfer from old credit card to new (34 months 0% interest - the 200 fee being significantly less than SLC interest over 34m).

Only when all this had gone through with no hiccups did I call SLC and pay, from current account, my loan in full.

Im now spreading the cost over 34 months with no interest, have already paid a decent chunk to lower the monthly minimum repayments.  I could potentially get another 0% balance transfer card at the 33 month mark if not fully paid, but my aim is to avoid this and get the damn thing paid

Nasqueron

It's fine that you did it but no clear reason why. I'm on Plan 2 and based on the last interest addition and payment, I paid down net £5.50 or something this month, from a debt of £15k. With the lower rate now I will clear a bit more each month but I would never entertain the idea of taking on real, life affecting debt, to clear the student loan which will be wiped when I get to 65 assuming it's not paid off. The student loan doesn't affect my credit and there is no risk of default if I cannot pay it e.g. if I lose my job, I can simply declare that.