Need an interest-free loan?

[Tallguy]

If anyone's desperate for an interest-free loan and you've got a good credit history, you might be interested in this.

I took out a Virgin Mastercard (which is MBNA underneath) with a 0% balance transfer - the idea being, I'll transfer my outstanding balance on a current 0% deal and still pay no interest. There is a 3% fee, but the balance is 0% until Feb 2011.
This is known as "credit card tarting", and I'm a regular "tart", it's all about cleverly paying the absolute least you can for any debt you have.

Here's the clever bit - As well as 0% balance transfers, I can also move money across into my personal bank account OR write their special cheques, and that part of it is ALSO 0% until Feb 2011. As the Virgin lady on the phone said (!!), it's an interest-free loan. As long as it's all paid back by Feb 2011, I won't pay a penny.

Theoretically, I could take out the money, make a year-long investment, pay back the minimum amount each month, cash in the investment and then repay the lot, making a profit. I'm not disciplined enough for that, though!

Or, more likely, I could buy a £2600 bike from a private seller and pay it back at £200/month over 13 months, interest free!

Now, if only my personal finance manager (aka Mrs Tallguy) will let me put my cunning plan into action!



Disclaimer - I really don't advocate the addition of debt, only the clever movement of existing debt - unless you REALLY REALLY want something! :smt047

[Jackie_Black]

I had one, the interest free ran out then two months later they hoiked the interest up to 26%

BEWARE!!

[thefallenangel]

they won't allow you to do it or natwest wouldn't with me. And also sometimes it's inital periods (i.e for transfers made in the first 3 months).

Yes it might well be tarting but small amount loans have an interest rate of 13% so for every £1k you borrow you pay back another £100 on top.

[tigersaw]

umm, theres a 3% fee you said. You'd need to recover that from your investment, which just by itself would be tricky enough just now

[Tallguy]

I agree about increasing debt, it's all about being clever with the bills and paying it all back before the interest rate jumps. Discipline and calendars! :)

[pete m]

we get phoned 3 times a d ayby people saying anyone who took out a loan before 2007 need not pay it back or some such....i think they are targetting us cos we both took out credit cards in that period ...anyone know about this ?

[dizzyblonde]

we get phoned 3 times a d ayby people saying anyone who took out a loan before 2007 need not pay it back or some such....i think they are targetting us cos we both took out credit cards in that period ...anyone know about this ?

You only get three or four. Your very lucky. Today I counted at least five. And why do they always start at 4.30:rolleyes:

Yes maybe I'd like to get rid of it, but not to someone who targets me over the phone!

[454697819]

My V card has been good so far, and the plan is to have it paid off by the time the 0% expires..

Heres to hoping and not buying a new bike any time in the near future.

[phi-dan]

Just remember to get your minimum payments in on time, otherwise the 0% offer expires.
Guess who forgot and paid a day late? :rolleyes:
Still, plenty more 0% offers in the sea :D

[JamesMio]

http://www.MoneySavingExpert.com (http://www.moneysavingexpert.com/)

[Dicky Ticker]

Surely this is how they make money,transfer fee and people with the best intentions but one slip and your interest free borrrowing suddenly becomes expensive.
Either save up for what you want or shop about in the market for the lowest rate.
If we are talking buying a bike there are loads of 0% deals about at the minute.

[Tallguy]

All the above points are true, and it IS all about arranging your payments so no interest occurs. MoneySavingExpert.com is full of excellent advice on this, thanks James.

For new bikes there are lots of 0% deals, but I was especially thinking about those who could buy a second hand bike, cash, from a private seller AND maybe upgrade their leathers, luggage, tools etc as a 0% loan provided it was all paid off in time.

It's all about working the system in your favour and avoiding the charges using self-control and a calendar. This really isn't suitable for some people who are less rigorous with their finances, but for others it could be a very cheap way of managing debt - I'm not saying that all debt is bad, but it's about paying the least possible charges for that debt.

Of course, if you've already got an MBNA-managed card or a not-so-good credit record, this isn't relevant anyway!

And for me, it seems more likely that I'll be buying "a garden wall" rather than an SV1000, as Mrs Tallguy has the controlling opinion in this matter.

Coming, dear...