paying off loan with 0% credit card - good or bad idea?

[selfcare]

Hi
I'm rubbish with all things financial. Am gradually clawing my way out of debt and just starting to see some light. My credit card(s) debt has reduced significantly and is now £5, 206, consolidated into one loan. I repay £396.50 per month. The loan rate is about 12%. Although I swore I'd never touch credit cards again, I am tempted to get one on a long 0% spending deal to pay off the loan. Would this work/make sense? I would appreciate advice please from any financially savvy mumsnetters out there.

Hi Selfcare. Sounds like you are on th4 right road if the debt is coming down, do very well done for that. How long is the 0% over and what is the interest rate once the 0% expires? 20 months interest free is fairly common and at £396.50 per month would take 14 months to clear if you can keep that payment up. Well done for addressing this.

I doubt you can pay off a loan with a credit card. You might find fines/exit fees for paying off the loan early.

Thanks DownUdderer - I hadn't even considered exit fees for early repayment!
Also, Bagpuss, I very much appreciate your kind words at the end of your comment The 0% would be over about 27 months and go to something like 19 - 21%APR once the 0% expires.

Hi OP
Have you paid the interest on the loan up front ?
If thats the case it wont make any difference moving to 0%
Not much point moving it if you gave plus anither CC can affect your credit rating

You’d need a money transfer credit card on a 0% deal.

Call up your loan provider and W quote about settlement fees, exit fees etc.

12% is a high interest rate so could be worthwhile. However you may not get approved for a 0% deal for the amount you need so that needs to be weighed up.

Scoot over to Moneysavingexpert and look at the Best 0% money transfer credit cards. There should be a ‘soft check’ where you can see if you’re likely to be accepted.

Would you actually be able to get a CC with enough on it to cover the entire loan? Or would you have to still pay the loan + pay the CC as well?

Have you shopped around for other loans? 12% is a high interest rate so with good credit rating it should be possible to get much lower.

They can't charge more than about 2 months interest as a settlement fee so if you can either get a money transfer credit card or a loan with a lower rate, it will work out cheaper, so you've nothing to lose in applying.