topic Re: Personal Loan vs Balance Transfer in Personal Finance

Personal Loan vs Balance Transfer

Varsity_Lu — Fri, 16 May 2025 20:52:48 GMT

Just spit balling here, but wouldn't a 0% interest card with 3% transfer fee be a better deal than a personal loan for small, short term loans? Say a person needs an extra 5 grand for something. Wouldn't charging that amount to a card and then finding a 15-18 month 0% card deal with 3% transfer fee to move it to be a better option than taking out a $5k personal loan at like 12%? Obviously, this depend on the ability to pay it off in 15-18 months. Anyone do this?

Re: Personal Loan vs Balance Transfer

GZG — Fri, 16 May 2025 21:22:34 GMT

@Varsity_Lu wrote:
Just spit balling here, but wouldn't a 0% interest card with 3% transfer fee be a better deal than a personal loan for small, short term loans? Say a person needs an extra 5 grand for something. Wouldn't charging that amount to a card and then finding a 15-18 month 0% card deal with 3% transfer fee to move it to be a better option than taking out a $5k personal loan at like 12%? Obviously, this depend on the ability to pay it off in 15-18 months. Anyone do this?

some things can't be credit carded, but yeah assuming you have the credit and the knowhow, a credit card can easily beat out a personal loan

Re: Personal Loan vs Balance Transfer

Tazman81 — Fri, 16 May 2025 21:31:45 GMT

Yes your logic is sound. If you are keeping the funds for the 15-18 month that you indicated. On a credit card with 0% interest and a transfer fee of 3%, you would be $150 up front as the fee, and then no additional interest monthly for the promotional period. Whereas if you take out the personal loan at 12% interest, you would pay roughly $50 a month in interest until the loan was repaid.

Of course I would knock 2 months off whatever the promotional term is to have it paid off due to the high interest rate of a credit card with a balance after that promotional period. Best of luck and let us know what you decide.

Re: Personal Loan vs Balance Transfer

SouthJamaica — Fri, 16 May 2025 22:12:54 GMT

@Varsity_Lu wrote:
Just spit balling here, but wouldn't a 0% interest card with 3% transfer fee be a better deal than a personal loan for small, short term loans? Say a person needs an extra 5 grand for something. Wouldn't charging that amount to a card and then finding a 15-18 month 0% card deal with 3% transfer fee to move it to be a better option than taking out a $5k personal loan at like 12%? Obviously, this depend on the ability to pay it off in 15-18 months. Anyone do this?

1. Factor in the fact that if you do the transfer for more than 28% of the credit limit you would get a hit on your FICO scores.

2. If the "something" is a purchase, it would be better to just buy the "something" with the promotional card at the 0% rate, and avoid the balance transfer fee altogether.

3. There are credit union cards that do not have a balance transfer fee.

Re: Personal Loan vs Balance Transfer

FicoMike0 — Sat, 17 May 2025 00:34:23 GMT

Sounds good in theory.

Ditto @SouthJamaica

Id be really concerned about going over 69% utilization, that's balance chasing territory. Especially if I had any sync cards!

Re: Personal Loan vs Balance Transfer

Thomas_Thumb — Sat, 17 May 2025 03:17:05 GMT

Agree with SJ point #2 - buy direct with the 0% promo card ...unless the high apr card offers 5% or more cash back and the promo card has 0-1% CB. Or if the 0% promo is only available for a balance transfer

Re: Personal Loan vs Balance Transfer

Gregory1776 — Sat, 17 May 2025 20:31:26 GMT

Yes. Using an open card is always something I like. Appeal of a card like Disco, maybe the Citi Simplicity (I still have a BT on that) which I may or may not find out soon if I don't PC to the Custom Cash.
loans are also a new account, as do a new 0% card.IMG_4049.jpeg