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I would appreciate any advice to see if my understanding could work and/or if there is anything I might not be factoring in or not understanding correctly.
Ex. I currently have a 30k personal loan at say a 10% interest rate today.
Would I be able to apply for a few credit cards that offer the 0% promo (Ex. say two different cards with a 15k transfer balance) to payoff the personal loan?
What is the max balance amount a credit card company can usually offer for a transfer balance (10k?)? Since one credit card likely wouldn't be able to fully payoff the entire personal loan then is doing a partial balance transfer still allowed? If so, how does this typically work? Is there anyway the personal loan company could reject this (there is no prepayment penalty)?
Note: I understand the biggest concern with my thought is not being able to payoff the credit card balances before the promo periods end and then getting hurt with the high rates. Also that credit card companies typically charge a 3% balance transfer fee. The only reason I am thinking this route is because within the year I will be receiving enough funds to cover my personal loan balance from an investment I had. So my thought is that I would rather pay a $900 transfer balance on 0% credit cards for less than a year than about ex. 3.5k in personal loan interest until then.
The credit limit on your new credit card will depend on your credit score and what limits/balances you have on other credit cards. So, what's your credit score, DTI and highest limit credit card.
Unlikely you will get a card with a 30K limit but when you get the new card you can always call the credit card company and ask for an increase of the limit.
Your other option is to get a new card and use it for all your spending during the initial 12 month no interest period while you pay off your personal loan. Of course, if you don't pay off the promotional balance at the end of 12 months you'll be back or worse off from where you started.
You may want to read the cc agreement,not sure if you can use the credit line to pay off personal loan?
10% is high,cant you negotiate with your lender?
I would appreciate any advice to see if my understanding could work and/or if there is anything I might not be factoring in or not understanding correctly.
Ex. I currently have a 30k personal loan at say a 10% interest rate today.
Would I be able to apply for a few credit cards that offer the 0% promo (Ex. say two different cards with a 15k transfer balance) to payoff the personal loan?
What is the max balance amount a credit card company can usually offer for a transfer balance (10k?)? Since one credit card likely wouldn't be able to fully payoff the entire personal loan then is doing a partial balance transfer still allowed? If so, how does this typically work? Is there anyway the personal loan company could reject this (there is no prepayment penalty)?
Note: I understand the biggest concern with my thought is not being able to payoff the credit card balances before the promo periods end and then getting hurt with the high rates. Also that credit card companies typically charge a 3% balance transfer fee. The only reason I am thinking this route is because within the year I will be receiving enough funds to cover my personal loan balance from an investment I had. So my thought is that I would rather pay a $900 transfer balance on 0% credit cards for less than a year than about ex. 3.5k in personal loan interest until then.
Quote:
Originally Posted by mojo101
You may want to read the cc agreement,not sure if you can use the credit line to pay off personal loan?
10% is high,cant you negotiate with your lender?
I never paid transfer fees or worry about eligibility of using credit cards for your debt.
What you do is apply for a no interest credit card for purchases. Start putting all of your bills you can onto it. That frees up the cash flow to pay the interest bearing debt off.
Then when there’s like 3 or 4 months left on the no interest you get a new card and do the same thing. Charge to the new no interest card, and use the cash flow to pay off the other card in installments either over the final 3 or 4 months or all at once depending on cash flow needs.
Manually transfer the balances without fees and manage your cash flow needs.
I never paid transfer fees or worry about eligibility of using credit cards for your debt.
What you do is apply for a no interest credit card for purchases. Start putting all of your bills you can onto it. That frees up the cash flow to pay the interest bearing debt off.
Then when there’s like 3 or 4 months left on the no interest you get a new card and do the same thing. Charge to the new no interest card, and use the cash flow to pay off the other card in installments either over the final 3 or 4 months or all at once depending on cash flow needs.
Manually transfer the balances without fees and manage your cash flow needs.
I would not advise such a route. What if some personal tragedy befalls OP and he/she suddenly needs that money? Now you're stuck with all that money in these high-interest credit cards with no way out.
Rather than try and play this game, why not bust your tail and pay it off? Work a second job. Cut down on all non-essential expenses, etc. This shell game can and will catch up to you before long. Better to pay it off and then never get into such a predicament ever again.
Some credit cards require that you hold the cards for a stated time period before using a 0% loan. Some also require that the balance transfer be another credit card and not another loan.
if you are really getting funds this year, why bother? Keep paying your bills and pay the loan off when you get the funds.
I would not advise such a route. What if some personal tragedy befalls OP and he/she suddenly needs that money? Now you're stuck with all that money in these high-interest credit cards with no way out.
Rather than try and play this game, why not bust your tail and pay it off? Work a second job. Cut down on all non-essential expenses, etc. This shell game can and will catch up to you before long. Better to pay it off and then never get into such a predicament ever again.
sell a few things around the house on Ebay,that should raise $$.
LAPTOP,Iphone,ipod,gold chains,etc
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