bank loan onto credit card

ragdoll1966

I've just taken out a loan with two separate banks with different interest rates both over five years (don't ask) and am now wandering if I should transfer the bulk of each loan onto a credit card with a whole of life transfer interest rate. My query is that because the bank interest rate on the loan is fixed do they just add on the amount of interest I'd pay over the five years right at the start onto the loan and then divide the total owed by 60? Or would it be worth my swapping onto a lower interest rate card?

CLAPTON

no the interest is not added on at the beginning.

depending upon the interest rates it might be worth swapping.
but have you considered how you will swap... not many cards allow a BT from a loan.

ragdoll1966

Here's a thought, but would it work?? If I got a cash lump sum off a card to make a substatial repayment of the loan, then (and I accept there will be added costs in this) swapped that onto a lower interest rate card would that work?

ragdoll1966

Are there any other "mule" cards out there apart from the Egg Money card that the site suggests to use to transfer a bank loan onto a credit card?

nzseries1

ragdoll1966 wrote: »

Are there any other "mule" cards out there apart from the Egg Money card that the site suggests to use to transfer a bank loan onto a credit card?

No, that's the only one, and I got turned down for it !!!

ragdoll1966

So did I after being "interogated" by an underwriter for about an hour - she said it was partly because I'd only just taken out a Egg Visa card so they wanted to know how I would manage that over the next 6 months... But secretly I think it was because I told them exactly why I wanted the Egg Money card - and because they aren't going to make anything out of it why should they bother processing my application - but we'll never know.
It then dawned on me - could I simply do a balance transfer on to another credit card with a zero balance then get a cash withdrawal from that one - I mean the principle is the same and if it's a credit balance before I withdraw the cash it surely can't be charged for interest although possibly could they still charge me the cash advance fee? Any ideas if this is allowed??

nzseries1

Apparently it's in your terms in conditions that you're not allowed to intentionally make your credit card go into credit (except of course in the case of Egg Money). I heard stories on the forum about how they freeze accounts that go way into credit and are used to withdraw money in this way. You'd have to read your terms and conditions very carefully.

That, or your credit card company may reject the balance transfer (send it back to the originating bank) if there isn't actually a debt on the card.

ragdoll1966

So because I got turned down my wife applied and she got accepted - she doesn't have a Egg card in her name.

bigbloke45

Taking cash out on a credit card is not a good idea. You will get charged interest at a high rate from day one. So, even if you pay off the outstanding balance at the end of the month, you will still have to pay interest for the number of days from the start of the transaction.

Also, if you need to have the loans over 5 years, transferring to a shorter period will mean you will probably have to refinance again.

Good luck!