[dobbo99]

can this actually be done or is it a myth?

ie can we pay off my Mrs bank loan using a 0% card for 18months etc, saving £000's in the process.
presume there would be some sort of fee from the CC company, but would still be less that the APR on the loan.

[xenon]

Can't be done. It's regarded as a cash advance and therefore interest is payable, and from day one (you don't even get the 30 days interest free as you would with a purchase, once the 0% has finished)

[fulcrum]

Yes it can be done and this is the best deal as long as you pay it off within the 22 months.

http://www.barclaycard.co.uk/persona...lance-transfer

As long as your loan is not with Barclays

MBNA also do a life time version with a 5.8% fixed rate

[phil200tdi]

It can be done provided the T&Cs of the loan allow early payment. There may be early repayment charges.

The BT fee is as important as the duration of the 0%.

It depends how much you can pay off before the end of the term.


In general it is a very easy way to get a low interest loan!

[shrink]

yep, most loans that allow early repayment will let you pay by card. Its just a normal card transaction and should not be treated as a cash advance.

[yeti racing]

Can be done, as covered above!

[xenon]

I stand corrected. I thought a payment such as that was a cash advance. Seems like a good plan, then....

[yeti racing]

Think its known as being a card whore, I have used in the past when my lifestyle cost more than my salary

http://www.moneysavingexpert.com/car...r-credit-cards

[dobbo99]

having sat down with pen and paper, we only actually save around £280 by doing this, once the early settlement figure is taken into account and the transfer fee to the card (which is 3%)
I still dont see why there should be a transfer fee, but I dont make the rules.

I had visions of massive savings for some reason. not that £280 isnt a worthwhile sum.....

[scooba0010]

Originally Posted by dobbo99

having sat down with pen and paper, we only actually save around £280 by doing this, once the early settlement figure is taken into account and the transfer fee to the card (which is 3%)
I still dont see why there should be a transfer fee, but I dont make the rules.

I had visions of massive savings for some reason. not that £280 isnt a worthwhile sum.....

Being a tight git id say do it asap £280 is a years RFL or service on the car

[phil200tdi]

Originally Posted by dobbo99

I still dont see why there should be a transfer fee, but I dont make the rules.

With a 0% deal the BT fee is the only way the CC provider is making money out of this.

Barclaycard were doing 50% off the BT fee until recently (circa 1.5%) which is crazy cheap to borrow upto £10k over 22 months!

[The_Bear_Yid]

Another factor to consider is that these offers are for new customers and you can't chose your limit. So if you owe £10k and they only offer you an £8k limit then it maybe pointless.

£280 is still a nice meal out, money for a new gadget or a few tanks of fuel at the end of the day.

[xs2man]

You must either have an exceptionally good deal on your car, or be very near the end of the payments to only be £280 better off doing it this way.

The best way to do it is to pay off the loan with a new card, and hopefully this goes down as a purchase. Many cards do 0% on purchases for around 6 months. Giving you 6 months to pay off as much as you can afford. Then you swap balances to a 0% transfer card. Usually at around 3%, so a £10k loan then costs you £300 to swap. Say you get a 20 month deal, paying in £250 per month, by the time it comes to paying off the card (another balance transfer), your down to £5300, so that balance transfer only costs you £159. So total interest payment over 40 months (assuming you get a similar 20 month deal) is only £459. Okay, your balance at this point will only be the interest you have paid though (40 x £250 = £10,000). I have yet to see a £10k loan, over 40 months, with only £459 interest. This Math takes no account of if you use any 6 month at 0% though. Assuming you do it breaks down:

£10k on card.
After 6 month at 0% BT on £8500. New balance = £8755
20 month at £250 pm. New Balance = £3755 Then BT
New Balance = £3867.65
15 months at £250, Balance (Final Payment) = £117.65

Total cost = £10367.65

Total charge for credit = £367.65 (or 3.7% over the whole term)

Obviously, the higher the monthly payment you put in, the cheaper this becomes (example: at £300 pm, charge for credit is £319.38, and paid off in 34 months).

In general, Barclaycard offer the best deals on this at the moment, so make sure the first card isn't a Barclaycard, as you cant swap balances between cards from the same company.

Still, £280 is decent money. A months car payment? Some Rubber? Service? Insurance or as said above, a new gadget. Its not difficult to do, and while the process may take a week or so, it'll only really take an hour or so to do. So unless your getting paid £280 an hour, then its worthwhile.

[dobbo99]

its not as much as £10k though, so my savings are less in that respect. Infact I dont actually know how I got £280 saving, because having worked it out again, its much less:

5k @ 6.8% = £361.84 interest over 24mths.
early repayment charge is £90 (based on the 5k)

5'090k onto card @ 3% = £152.70 fee.

so my maths is £361.84 interest over the 24mths on the loan, or £242.7 (early repayment charge + transfer fee) to move it to a card. So my potential saving is £119.14

Is that right or am I overlooking something?

[xs2man]

Okay. SO £5k isn't very much to be making substantial savings. But there are a couple of things. For a start, if you pay it off with a 0% purchases card, you make 6 months of payments before paying the 3% BT fee. So your paying around £225 pm?

So if you do that, then your paying off £1350 before the BT, so at 3%, BT balance is is £3852.20. Then another 17 months at £225, and the 18th month at £27.20.

Total = £5202.20 Saving £159.64

Not a huge amount admittedly, but still worth saving IMO. Would be a good night out if nothing else.

[dobbo99]

agree, a night out is a night out.
I wasnt 'dissing' the savings part by the way, saving is saving at the end of the day.

[MEGA]

Originally Posted by phil200tdi

With a 0% deal the BT fee is the only way the CC provider is making money out of this.

Barclaycard were doing 50% off the BT fee until recently (circa 1.5%) which is crazy cheap to borrow upto £10k over 22 months!

Just took out this deal. 22 months, 50% off the fee.

Paid sub 100 to move 7500 on to the card.

[phil200tdi]

You are forgetting that the CC gives you a far more flexible repayment option.

You have to pay the minimum each month at least. But some months you may wish to pay more/less - not something you can do with a loan..