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Posted: Fri Nov 20, 2009 10:59 am Post subject: Loan or credit card?

i have a mortgage but want to try for a new deal - when i got my house i took out a loan to cover the refurb & as interest rates are low on my mortgage i am paying nearly £300 a month to my loan. it is for 3 years in total but i am considering transferring to a 0% credit card and paying it this way... is this a bad move?

i will pay it off quicker and the cost of balance transfer wont be as much as i pay in interest on the loan. i will always be able to pay over and above the £300 i currently pay to my loan so cant see the harm.

also i am struggling to get a good deal on my mortgage because my outgoings are high (because of this loan) is it better if it's on a card or is it worked out the same when they reassess for the mortgage?

thanks

Niicss · Posted: Sat Nov 21, 2009 2:23 am Post subject:

In my opinion, it is a good idea to transfer the HELOC to a 0% credit card. This is because HELOC is a secured debt and credit card debt, on the other hand, is an unsecured debt. Not only will it help you save money on the interest charge, but it'll help you release the property from the lien. However, you should remember that generally the 0% interest rate is an introductory offer and will remain valid for 12-15 months. After that you will have to pay the interest. So, if you are comfortable with it, you can go or it. The credit card company will provide you with a courtesy check and you'll have to use it to pay off the line of equity.

You can even refinance both the mortgages into one but it would depend upon the equity that you have in the property, your present interest rate and the interest rate that you would be receiving, your credit score and income, etc.

Posted: Sat Nov 21, 2009 11:25 am Post subject:

thanks for that advice - i was hoping someone would agree with me as initially i thought putting a large amount on a credit card was a bad idea but the more i think about it the more sensible it sounds. i do have equity in my house although the amount i'd end up paying with interest isn't worth it if i can afford to pay the debt off this way... (i think)

thanks

riseabove · Joined: 09 Nov 2009 Posts: 277 11.01 Dollars($)

0% cards are great, as long as you pay them off in full before the interest free timeframe ends. If you don't you may find your 0% interest rate vanishes and you get clobbered with an astronomical increase.

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Loan or credit card?