topic Re: Balance Transfer of a personal loan to a credit card in Credit Cards

Balance Transfer of a personal loan to a credit card

Anonymous — Fri, 20 Apr 2018 15:46:53 GMT

Hi all, this is my first post here....I have a $10,000 personal loan that is 35.95% APR. I just recently got a credit card with a $12,500 CL and I was thinking about transfering the loan balance over. My concern is having my score drop substantially because of the utilization going up on the card. I have an offer on the card for 0% interest for the first 12 months and no trnasfer fee. Right now I am paying $590 per month on the loan. I'm nervous about doing it so I'd like some feedback please!

I've been working really hard to fix my credit, two years ago this month I was 525 and I am now 733 and I don't know how a balance transfer will impact.

Re: Balance Transfer of a personal loan to a credit card

Anonymous — Fri, 20 Apr 2018 16:08:10 GMT

what is the term of your loan? balance transfers are good only for upto 15 months and will need to be paid up before end of balance transfer card otherwise penalties are severe. even if you left a $1 on your balance transfer before the special apr of 0% was offered to you the interest counts backwards. it must be fully paid.

So first things first, what is your term meaning months left on your 35.95% APR loan. Is it an installment loan, what are penalties of moving (is prepayment penalty applicable here).

Would you rather leave about a $1000 on the 35.95% APr card only to have credit bureaus report it for atleast 24 months.

On balance transfer, do you have to do transfer within the first 60 days or it can be done anytime.

Wouldn't you rather do the balance transfer just before the 60 days come to an end and have 12/15 months from there.

Can you re-negotiate your balance and refi from 35.95% to lower APR with the same creditor.

Wouldn't you get two different balance transfer cards and move balances to them.

What can you payoff once balance transfer happens.

My story

I have done $10k balance transfer with First Tech from Jan 2018 and is due Jan 20th, 2019. I have only made minimum of $179/mo on the card. Its very very difficult to pay down on such large amounts after all expenses.

4 months into it and i am scrambling to come up with extra extra $$$ to payoff or lower balance on First Tech card.

Similar Balance Transfers completed are

$1000 on Discover 1

$ 2490 on Discover 2

$4900 on WF Platinum 15 mos

$2200 on Alliant Platinum Visa

$1200 on Chase Slate

Still have $$ to transfer to Fifth Third Bank (waiting).

Re: Balance Transfer of a personal loan to a credit card

FinStar — Fri, 20 Apr 2018 16:11:48 GMT

Do you have any other open tradelines besides the one you were just approved for? Aside from the loan, what's your overall utilization?

If your balance transfer offer is for 12 months, are you planning on paying the transferred amount in 12 months? If so, you'd have to make payments in excess of $800 vs $590.

If you decide to transfer the full loan amount, then it'll report @ 80% which may considerably lower your score.

Re: Balance Transfer of a personal loan to a credit card

Anonymous — Fri, 20 Apr 2018 16:22:43 GMT

Sorry, I guess I should have incluede more detail. I took the loan for 24 months and I have 20 more to go so it will be finished December 2019. There is no prepayment penalty but there is no ability to refinance with them. My thought was if I do the transfer and continue to pay the same amount every month with 0% interest, it will be paid off much sooner.

Re: Balance Transfer of a personal loan to a credit card

Anonymous — Fri, 20 Apr 2018 16:24:19 GMT

I have 13 open accounts and my overall utilization is 9%

Re: Balance Transfer of a personal loan to a credit card

Kforce — Fri, 20 Apr 2018 17:16:37 GMT

On your current loan you will lose 2,958 dollars in interest the 1st year and 1,206 year 2nd for a total of 4,164 dollars. A 0/0 will save you a lot of money, however as others have pointed out you need to pay it off in full before the bell rings. At (0-int / 0-transfer / 12 months), payments need to be >= 833 per month. You might need to have peanut butter & jelly for lunch and give up coffee.

Re: Balance Transfer of a personal loan to a credit card

Anonymous — Fri, 20 Apr 2018 17:21:00 GMT

Have you tried to get a loan somewhere else first?

Re: Balance Transfer of a personal loan to a credit card

SouthJamaica — Fri, 20 Apr 2018 17:24:46 GMT

@Anonymous wrote:
Hi all, this is my first post here....I have a $10,000 personal loan that is 35.95% APR. I just recently got a credit card with a $12,500 CL and I was thinking about transfering the loan balance over. My concern is having my score drop substantially because of the utilization going up on the card. I have an offer on the card for 0% interest for the first 12 months and no trnasfer fee. Right now I am paying $590 per month on the loan. I'm nervous about doing it so I'd like some feedback please!

I've been working really hard to fix my credit, two years ago this month I was 525 and I am now 733 and I don't know how a balance transfer will impact.

Normally I would say to be careful about it, but in view of the wild and crazy interest rate you are paying on the loan, do it!!!!!! In a heartbeat. Do it now.

Re: Balance Transfer of a personal loan to a credit card

Kforce — Fri, 20 Apr 2018 17:46:48 GMT

@Anonymous wrote:
Sorry, I guess I should have incluede more detail. I took the loan for 24 months and I have 20 more to go so it will be finished December 2019. There is no prepayment penalty but there is no ability to refinance with them. My thought was if I do the transfer and continue to pay the same amount every month with 0% interest, it will be paid off much sooner.

If you have made the first 4 payments on the loan, your balance should be just shy of 8,800 not 10,000. This would reduce you 0/0/12 to about 733 dollar a month payments. Maybe you can keep the coffee !!

Re: Balance Transfer of a personal loan to a credit card

Dalmus — Fri, 20 Apr 2018 18:09:15 GMT

What am I missing, here? A 12 month 0% BT to a standard credit card would save him MASSIVE amounts of money vs leaving that balance in a 35% interest situation. Even if you don't pay off the entire balance in 12 months, you have saved a TON of interest, even if make the same payments to the credit card that you are making to the personal loan. Granted, you will want to throw as much money at it as possible while its still at 0% so that whatever balance remains after the 0% period is as low as possible. And you'll STILL be saving money over the original terms.

And, don't forget, currently utilitiy has no memory. If you're making large payments, each month that utility will drop and your score should recover relatively quickly.

Re: Balance Transfer of a personal loan to a credit card

UncleB — Fri, 20 Apr 2018 20:17:28 GMT

@Anonymous wrote:
what is the term of your loan? balance transfers are good only for upto 15 months and will need to be paid up before end of balance transfer card otherwise penalties are severe. even if you left a $1 on your balance transfer before the special apr of 0% was offered to you the interest counts backwards. it must be fully paid.

This was the case with many PLCC (store cards) in the past, but with most bank cards that people use for balance transfers there's no accrued interest (i.e. if the entire balance isn't paid in full before the promo expires, interest just starts being added on whatever is left unpaid).

As always there might be an outlier somewhere, so it's always prudent to read the fine print in any case.

Also, some balance transfers are good for longer than 15 months... Citi has a couple of cards that routinely offer 21 months. Again, it will just depend on the offer.

Re: Balance Transfer of a personal loan to a credit card

Anonymous — Fri, 20 Apr 2018 21:02:42 GMT

@Anonymous wrote:
what is the term of your loan? balance transfers are good only for upto 15 months and will need to be paid up before end of balance transfer card otherwise penalties are severe. even if you left a $1 on your balance transfer before the special apr of 0% was offered to you the interest counts backwards. it must be fully paid.

So first things first, what is your term meaning months left on your 35.95% APR loan. Is it an installment loan, what are penalties of moving (is prepayment penalty applicable here).
Would you rather leave about a $1000 on the 35.95% APr card only to have credit bureaus report it for atleast 24 months.
On balance transfer, do you have to do transfer within the first 60 days or it can be done anytime.
Wouldn't you rather do the balance transfer just before the 60 days come to an end and have 12/15 months from there.
Can you re-negotiate your balance and refi from 35.95% to lower APR with the same creditor.
Wouldn't you get two different balance transfer cards and move balances to them.
What can you payoff once balance transfer happens.

My story
I have done $10k balance transfer with First Tech from Jan 2018 and is due Jan 20th, 2019. I have only made minimum of $179/mo on the card. Its very very difficult to pay down on such large amounts after all expenses.
4 months into it and i am scrambling to come up with extra extra $$$ to payoff or lower balance on First Tech card.

Similar Balance Transfers completed are
$1000 on Discover 1
$ 2490 on Discover 2
$4900 on WF Platinum 15 mos
$2200 on Alliant Platinum Visa
$1200 on Chase Slate

Still have $$ to transfer to Fifth Third Bank (waiting).

Your wrong about the penalties if you don't pay it off before the 0% expires. Be careful giving people incorrect information.

Re: Balance Transfer of a personal loan to a credit card

Anonymous — Fri, 20 Apr 2018 23:23:42 GMT

@Anonymous wrote:
I have 13 open accounts and my overall utilization is 9%

If it were me I would talk to a local credit union. If you do in fact have a 733 credit score like you state, I'm sure they can refinance that personal loan down to a ~10% rate.

I wouldn't balance transfer your personal loan over. You will save money, but I'm almost certain putting that high of utilization on that card and the overall increase on your overall utilization will drop your credit score to the low to mid 600s easily.

If you are set on using the balance transfer and you can get a credit union to offer you a personal loan with a 10% rate, consider doing a balance transfer on the approximate amount you know you could pay off in during the 0% APR and push the rest to a refinanced personal loan

Re: Balance Transfer of a personal loan to a credit card

Anonymous — Sat, 21 Apr 2018 00:13:37 GMT

@Anonymous wrote:
Hi all, this is my first post here....I have a $10,000 personal loan that is 35.95% APR. I just recently got a credit card with a $12,500 CL and I was thinking about transfering the loan balance over. My concern is having my score drop substantially because of the utilization going up on the card. I have an offer on the card for 0% interest for the first 12 months and no trnasfer fee. Right now I am paying $590 per month on the loan. I'm nervous about doing it so I'd like some feedback please!

How long ago were you approved for this new card? If your score is that good, you might consider apping for a second card with a decent SL so that you can split the difference. Thus keeping your utilization down. That will give you 12 months breathing room to secure a new loan at a better rate, or you can try for better rate loan now. Although, having that one loan paid off would look good for getting a second one in 8 months. That is crazy high interest, I wish you the best of luck finding a solution!

Re: Balance Transfer of a personal loan to a credit card

Np1791 — Sat, 21 Apr 2018 06:28:51 GMT

Not sure if anybody has already mentioned this but not all balance transfers backdate interest. I’ve never had any balance transfer I’ve done do that. I would check with the creditor about that. If no interest is backdated I would do the transfer.

Re: Balance Transfer of a personal loan to a credit card

marmaladepie — Sat, 21 Apr 2018 06:57:15 GMT

Everyone has valid points here. What is your standard apr on the card after the BT promo period ends?

Re: Balance Transfer of a personal loan to a credit card

Anonymous — Sat, 21 Apr 2018 14:42:08 GMT

Get out from under that loan ASAP...you are just wasting $. Yes, if you complete the bal transfer completely to the new card, your Util on one card will be high and will likely lower your scores. But if you dint Need new credit afterwards, your score will rebound as you pay the balance down.

Be careful to pay at least as much as you were paying before. If at the end of 12 months you have a remaining balance, look for another 0%/no fee card to transfer to or open a personal loan at low interest.

Good luck OP!

Re: Balance Transfer of a personal loan to a credit card

Anonymous — Sat, 21 Apr 2018 15:23:58 GMT

@Np1791 wrote:
Not sure if anybody has already mentioned this but not all balance transfers backdate interest. I’ve never had any balance transfer I’ve done do that. I would check with the creditor about that. If no interest is backdated I would do the transfer.

It's always good to read through the whole thread.

Yes, a few posters have already brought up your point.