Xfer balance from a loan to a 0% credit card??

linnyb_4

Hi. Can anyone tell me if you can transfer a balance from an existing loan to a credit card to take advantage of 0% interest.
I currently have a loan with Lloyds and am being charged 10.9% apr and wondered if i can shift all of the 7K balance to 1 or more credit cards which offer 0% interest to pay off the whole amount before the 0% finishes.

Or are balance transfers only applicable from card to card only?

Im confused!!

CannyJock

linnyb wrote: »

Hi. Can anyone tell me if you can transfer a balance from an existing loan to a credit card to take advantage of 0% interest.
I currently have a loan with Lloyds and am being charged 10.9% apr and wondered if i can shift all of the 7K balance to 1 or more credit cards which offer 0% interest to pay off the whole amount before the 0% finishes.

Or are balance transfers only applicable from card to card only?

Im confused!!

There are a few cards that let you do this - the Virgin Money one is the best of the current offers, 0% for 15 months, 2.98% fee.

Main issue is if Lloyds will let you repay the loan early or if there are any early settlement fees.

Moggles_2

Can anyone tell me if you can transfer a balance from an existing loan to a credit card to take advantage of 0% interest?

Not directly. What you can do is ask the 0% BT card to transfer an overdraft to the card, in other words shift cash from the credit card to your bank account. A BT fee applies, but there are no other charges during the 0% period. You then have funds in your current account with which to pay off the loan

Caution: you cannot use any old 0% BT card. A handful have this capability:

a card issued by MBNA (e.g. Alliance & Leicester, MBNA itself, Sony, Virgin), Egg card or the Post Office card

alternatively, you can use Egg Money (not to be confused with the Egg card) in conjunction with any 0% or low-rate balance transfer card.

Mint periodically issues credit card cheques, which can be paid directly into your current account. Unless you already have them, this is the least satisfactory option, as cheques cannot be ordered and you never know when the next ones will turn up in the post.

Which option's best depends, to some extent, on which cards you have at the mo.

Moggles_2

If you will have savings to pay off your credit card balance before the 0% period expires that's great. The risk in paying for a loan in this way is that you can't be sure of another 0% credit card offer with a sufficient credit limit when your current deal(s) end(s) and the interest rate leaps to anything from 16.9% to 27.9% APR variable :eek: 0% BT deals could be a thing of the past in 12-15 months time and BT fees may have jumped to 5% or even 6%.

Always bear in mind that the reason the card providers can afford to lend you money at 0% for anything up to 15 months months is because, more often than not, customers do not clear the debt and end up paying crippling interest when the promotion period ends. This is the main way lenders claw back the cost of these promotions. If this were not the case, these 0% offers would have dried up long ago.

Also, you'll need to factor in the balance transfer fees and check the loan Ts & C's. As CJ says, some providers charge an early repayment penalty if the loan is settled in full

If you do decide to go the credit card route, make sure your credit file stays in top-notch condition ready for transferring any balance that remains in X months time

YorkshireBoy

Moggles wrote: »

0% BT deals could be a thing of the past in 12-15 months time and BT fees may have jumped to 5% or even 6%.

...so a LOB deal might be worth considering?

You'll need to make two applications...Egg Money and the LOB (or 3/5 year) card.

This article http://www.moneysavingexpert.com/cards/stooze-cash-credit-cards#trick will explain the general procedure.

Be mindful of minimum payments because, at 3% on some cards, they could be more than your loan payment is now...depending on the loan term.

Do not miss any payments, because the lender will remove the promiotional rate and put you on the kind of rates mentioned by Moggles above.

And finally, VERY importantly, once you've transferred a balance to whichever card you use, do not then make any purchases with it.

linnyb_4

Hi Everyone,

Many thanks for your replies, i now have some great information to work with.

If anyone wants to add more replies with other options i'd be very grateful.

Thanks

LinnyB