balance transfer

houndgirl

Friend was wondering if she can transfer the remains of a loan which I think she has £1500 left on it to an intrest free credit card so she can pay it off quicker.I believe she has about a year left on the loan but thought that if it was on a card she could pay it off quicker.The loan wont allow her to make top up payments.
She has no access to a computer so I told her I would find out for her.

GeorgeUK

If she calls the bank for a settlement figure, you could see exactly how much she would need to pay.

Say this was 1400
If she got a 0% card and paid it towards the loan (The card would probably need to allow super balance transfers), this could cost 1400 + 3% BT fee
= 1442 so she would be saving £58.

houndgirl

thats sounds great,will tell her tonight.How does she go about getting the loan paid off by the card?Does she phoe the credit card people and telling them the loan account number,and the amount?

Moggles_2

houndgirl wrote: »

How does she go about getting the loan paid off by the card?

It's crucially important to apply for the right credit card.

I would go for Egg card or Virgin. Both offer new customers 0% on balance transfers for extended periods. What's more, they'll allow you to transfer cash from the credit card to her current account. (Just a handful of credit cards have this capability). She then has cash in her bank account equal to the balance on the 0% BT card and can pay off her loan.

houndgirl

does this mean that she cant just phone the credit card just pay the loan off?I believe she already has a card,but Im not sure which one it is but she said that it had a decent period at 0%

Moggles_2

houndgirl wrote: »

How does she go about getting the loan paid off by the card? Does she phone the credit card people... ?

To maximise the 0% period, I would plump for Virgin. 15 months is currently available to new customers. A 2.98 % BT fee applies. You can borrow up to 95% of your credit limit.

IMO, it's best to request the transfer by phone (as opposed to online), so you can check the 0% interest rate will definitely apply.

She can do this when she calls to activate the new card. There's a freefone number. The money arrives in your bank account in about 6 days.;)

Moggles_2

houndgirl wrote: »

I believe she already has a card. I'm not sure which one it is but she said that it had a decent period at 0%

To help you further, we need to know which card(s) she has at the mo.

GeorgeUK

Many Cards that offer 0% promotions (like the Virgin 15 months) have a restriction on when the Balance Transfer must be made by. This may be 30 days, so although the card your friend has may be 0% a new BT may not get that promotional rate.

With the super balance transfer cards, you could phone to make a Balance transfer and confirm that it would be going to a current account, what the fees are and that it will not be charged as a cash advance or money transfer. Once the funds have cleared in your current account, then this cash could be used to pay off the loan.