Colin
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Registered: 4th Apr 02
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I've got a small personal loan I took out to help buy a my car last year, it seemed like the best solution at the time.
I owe approx £3k & 2yrs to pay.
I now want to pay my loan off asap.
I usually have around 500-600 a month left over each month to do whatever with save or spend after bills, so was going to just start making lump payments for the next 6 months or so to pay it off, I can do this as per the t&c of my loan.
I have another option however, this is that according to my online banking (my loans with the bank I use!) Ive got available up to £3k agreed overdraft, I can have no questions asked.
I thought if I took this I could pay off the loan straight away & then pay off my overdraft over the next few months, though with more spare money each month as I wouldnt be paying the £160 of the loan I currently do each month!
Does this sound like a good idea?
My loans 10.9% apr, not sure what i'l be chearged for having sure a large overdraft?? Its with Halifax?
Thanks in advance for any comments!
[Edited on 15-09-2008 by Colin]
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Cosmo
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Registered: 29th Mar 01
Location: Im the real one!
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Id check what the % is on the overdraft and then make the call.
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Colin
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Registered: 4th Apr 02
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1.50% a month
Typical (19.5% EAR)
Hmmmmm Im not really disolving that.....does that mean 1.5% interest charged on what I owe paid each month?
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Colin
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Registered: 4th Apr 02
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So if im 2k overdrawn Id pay £30 a month?
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Tommy L
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Registered: 21st Aug 06
Location: Northampton Drives: Audi wagon
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Yes i think
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deano87
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Registered: 21st Oct 06
Location: Bedfordshire Drives: Ford Fiesta
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I know the interest rates vary, but I personally don't like the idea of getting in debt for the sake of debt. If I was in your situation, I'd pay off lump sums every month, as you wish. Then if things get tight one month i.e. £600 is taken up with an emergency flat repair, all you have to pay is £160.
Alternatively, what credit cards do you have?
I have a Virgin credit card which does 0% balance transfers (to other credit/store cards AND current accounts).
It's a bit long winded, but if you really wanted to save money:
1) Find a credit card with 0% for at least 6 months (term you need) on balance transfers and hope you get a £3k credit limit.
2) Get your £3k overdraft.
3) Pay off your loan.
4) Pay off your £3k overdraft with credit card, giving you 0% for X months.
If you apply for the 0% card, and don't get a credit limit high enough, you could still do it, or just cut up the credit card and forget you've got it.
I'm a student with £1300 credit limit on the Virgin card, so I'm sure you'd get £3k.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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If the loan is 10% APR and overdraft is 19%, keep the loan.
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Twiggy
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Registered: 15th Oct 04
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quote:
Originally posted by deano87
I know the interest rates vary, but I personally don't like the idea of getting in debt for the sake of debt. If I was in your situation, I'd pay off lump sums every month, as you wish. Then if things get tight one month i.e. £600 is taken up with an emergency flat repair, all you have to pay is £160.
Alternatively, what credit cards do you have?
I have a Virgin credit card which does 0% balance transfers (to other credit/store cards AND current accounts).
It's a bit long winded, but if you really wanted to save money:
1) Find a credit card with 0% for at least 6 months (term you need) on balance transfers and hope you get a £3k credit limit.
2) Get your £3k overdraft.
3) Pay off your loan.
4) Pay off your £3k overdraft with credit card, giving you 0% for X months.
If you apply for the 0% card, and don't get a credit limit high enough, you could still do it, or just cut up the credit card and forget you've got it.
I'm a student with £1300 credit limit on the Virgin card, so I'm sure you'd get £3k.
Have you ever called up and moaned? If so i have proberbly spoke to you 
Ohh yeh what Ian said....
On the credit card issue....
Only use if its a long ish term loan (12mths+) ... But if you can pay it off in 5mths it might not be worth it as the balance/money transfer fee is 2.98% = £89.40 which maybe more than the loan/overdraft interest
[Edited on 15-09-2008 by Twiggy]
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deano87
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Registered: 21st Oct 06
Location: Bedfordshire Drives: Ford Fiesta
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No, never had any complaints.
Oh yeah, I forgot about the 3% balance transfer fee 
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Colin
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Registered: 4th Apr 02
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Ive had a rethink & worked out I could manage to clear it by paying half from cash sat in my current account & half stuck on a 0% card.
So next Q. is whats the best 10-12 month 0% cards on offer?? 
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Ian W
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Registered: 8th Nov 03
Location: Wirral, Merseyside
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quote:
Originally posted by Colin
Ive had a rethink & worked out I could manage to clear it by paying half from cash sat in my current account & half stuck on a 0% card.
So next Q. is whats the best 10-12 month 0% cards on offer??
I went with Capital One, they only offered me 1k credit limit, waste of time when I put on the form that I had a balance of 1k to transfer on to it 
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Colin
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Registered: 4th Apr 02
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Oh & will I be able to pay off a loan with a credit card?
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Ian W
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Registered: 8th Nov 03
Location: Wirral, Merseyside
User status: Offline
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quote:
Originally posted by Colin
Oh & will I be able to pay off a loan with a credit card?
Ye, just phone up and say you want to settle the loan.
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deano87
Member
Registered: 21st Oct 06
Location: Bedfordshire Drives: Ford Fiesta
User status: Offline
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quote:
Originally posted by Ian W
quote:
Originally posted by Colin
Oh & will I be able to pay off a loan with a credit card?
Ye, just phone up and say you want to settle the loan.
BUT THEN IT WON'T BE A BALANCE TRANSFER. It will be a purchase, so that is something to bare in mind.
http://www.moneysupermarket.co.uk for credit card comparisons. If you're going to pay off the loan company directly with a 0% card, it will need to be purchases it's 0% on, not balance transfers.
No upfront fee (i.e. 3%) for purchases either.
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