@RentSeeking wrote:I'd highly recommend actually setting up the amortization table. I would find it highly unlikely that you would have an interest rate high enough that you would actually save money doing this.
Remember, you pay the balance transfer fee on the ENTIRE balance--loan APRs are only paid on the REMAINING balance. I'd ballpark the breakeven point for loan interest as 1.8x-2x of the balance transfer fee.
For example, if you pay a 4% fee, and your loan has a 7% interest rate, you actually LOSE $25. Obviously, if your loan rate is lower, the fee higher, or if you can pay more earlier, this can be even more signifcant.
Balance $ 15,000 BT Fee 4% Interest Rate 7% Payment Interest Principal Balance 1 ($1,297.90) ($87.50) $1,210.40 $ 13,790 2 ($1,297.90) ($80.44) $1,217.46 $ 12,572 3 ($1,297.90) ($73.34) $1,224.56 $ 11,348 4 ($1,297.90) ($66.19) $1,231.71 $ 10,116 5 ($1,297.90) ($59.01) $1,238.89 $ 8,877 6 ($1,297.90) ($51.78) $1,246.12 $ 7,631 7 ($1,297.90) ($44.51) $1,253.39 $ 6,377 8 ($1,297.90) ($37.20) $1,260.70 $ 5,117 9 ($1,297.90) ($29.85) $1,268.05 $ 3,849 10 ($1,297.90) ($22.45) $1,275.45 $ 2,573 11 ($1,297.90) ($15.01) $1,282.89 $ 1,290 12 ($1,297.90) ($7.53) $1,290.37 $ 0 Sum ($15,574.81) ($574.81) $15,000.00 BT Cost $ 15,600
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