Which card?

okgo

Hi guys,

I am after some advice in terms of paying a debt off.

I have a loan that currently if I carry on the monthly payments till the end that stands at £8500. It has an early repayment of around £5500 I forget the exact figure.

I am paying about 16% on this, now what I am thinking of doing it getting a card that offers enough of a limit to pay the loan off @ £5500 therefor saving me the insurance (I know) and saving me some interest, and then paying 3k I have in savings straight off that card.. followed by repayments of the last 2.5k over a year or so I guess at 0% (hopefully)

I am 20
Have just started a new job but earn about 25k
Live in rented accomodation
Have one egg credit card

Is the above a good idea? And where would you suggest I try first to obtain such a card? If there is a better way please let me know.. As I want this loan gone and I will be damned if I am paying £2500 that I dont need to.

Thanks people

CannyJock

okgo wrote: »

Hi guys,

I am after some advice in terms of paying a debt off.

I have a loan that currently if I carry on the monthly payments till the end that stands at £8500. It has an early repayment of around £5500 I forget the exact figure.

I am paying about 16% on this, now what I am thinking of doing it getting a card that offers enough of a limit to pay the loan off @ £5500 therefor saving me the insurance (I know) and saving me some interest, and then paying 3k I have in savings straight off that card.. followed by repayments of the last 2.5k over a year or so I guess at 0% (hopefully)

I am 20
Have just started a new job but earn about 25k
Live in rented accomodation
Have one egg credit card

Is the above a good idea? And where would you suggest I try first to obtain such a card? If there is a better way please let me know.. As I want this loan gone and I will be damned if I am paying £2500 that I dont need to.

Thanks people

Definitely a good idea to restructure your debts onto the lowest APR possible allowing you to clear the capital as quickly as possible with the minimum interest.

You should read the article on your credit rating and follow the advice there (get on electoral register etc).

Assuming your payment history with Egg card is good, their CS department could be your first place to look. They have a 0% deal for new customers, if you've got a clear balance, will they give you the same deal and will your credit limit cover it?

I'd allocate the £ 2000 cash to the loan right away, to lower the credit limit you're looking for from £ 5500 ish to £ 3500 ish.

If I were you I'd go for the Virgin Money card, 0% for 15 months, 2.98% fee, first repayment 3%, then 14 payments of £ 25 (then it's out of the introductory offer and reverts to normal interest). If successful, you can transfer the £ 3500 ish directly to your current account (one of the very few cards that let you do this), add it to your £ 2000 savings and write the loan company a cheque for the £ 5500 ish.

Then pat yourself on the back for saving £ 3000 in interest and start working on clearing the remaining credit card balance.

okgo

Do you think that If I paid off 3k now then the lower settlement fee would reflect such a saving?

As you say then I would only need around 3-4k on the card.

No I have only had the egg card for less than a month as to build a credit rating as I recently changed job..and the limit is £500

So you would say, pay the 3k into the loan, reduce the whole figure to around £5800. Resulting in an early settlement of circa 3k I should think.

Then going to virgin and trying to get a card that has the intorductory rate and a limit of around 4k?

Paying the early settlement fee, then that leaves the 3k ish on the card to try and clear in the 15 month period?

Any tips on how to get the bigger limit? And are the chances of getting sucha limit going to be slim?

Regards

okgo

BTTT I want to know if my above thinking is right..

And where should I apply for such a card

CannyJock

Depends if the loan company will allow multiple partial payments. Some of them you have to make a single "settlement" payment. You'll need to phone the loan company to check this one out. If they let you and they'll reduce your settlement figure then do it for sure.

Basically, if you go to http://uk.virginmoney.com/
then you can apply for it.

The limit they give you will depend on your individual circumstances, but household income is a big factor - see Martin's article on "Improving your credit score" for more details.

EDIT: Have you already checked your free credit report from Experian? (free trial, cancel within 30 days to avoid a £ 6.99 a month subscription) - detail in the same article on improving your credit score.