Can I transfer a loan to a 0% credit card?

Here’s how you could cut your interest payments by transferring a loan to a 0% credit card.

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Are you looking to cut the amount of interest you’re paying on an existing loan? A credit card offering a 0% interest rate for a set period could be a useful means of achieving that goal.

Money transfer credit cards allow you to transfer an existing non-credit card debt and benefit from a lower interest rate for a set period. This could help you pay back your loan at a faster pace and improve your financial situation.

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As ever, there are a number of things to consider before obtaining a money transfer credit card, and there are potential pitfalls. Read on to find out more about them, as well as why a money transfer credit card could be worth considering.

How does a money transfer credit card work?

A money transfer credit card works in a similar way to a balance transfer credit card. In other words, existing debt is transferred onto a new credit card with a lower rate of interest, sometimes 0%, for a set period. There is, however, often a fee for the transfer. This fee is often less than the amount of interest that is saved; as a result, you can often save overall from having a balance transfer or money transfer credit card.

The difference between a money transfer credit card and a balance transfer credit card is that the latter can only be used to transfer an existing credit card debt. With a money transfer credit card, the cash can be paid into any account and used to repay, for example, a personal loan.

For instance, an individual may have a £5,000 personal loan that has an interest rate of 7.5% and be making a payment of £200 per month. At the present time it is possible to obtain a money transfer credit card that has a 0% interest rate for 28 months, but that charges a 3% fee for a transfer. Obtaining such a card could allow the borrower to repay their loan three months faster, and in doing so save £287 in interest costs after fees have been deducted.

Potential pitfalls

Although using a money transfer credit card can reduce interest payments during the 0% interest period, following that the interest rate can revert to a relatively high rate. As such, borrowers who do not repay their loan by the end of the interest-free period may end up paying a higher amount in interest than if they had stuck with their original loan.

Also, some lenders charge a fee for settling a loan early. It is important to factor the fee in before considering how much you can save from obtaining a money transfer credit card.

Money transfer credit cards may offer low interest rates on debt that is transferred. However, the interest rate charged on new purchases may be higher than for other credit cards. Therefore, it is worth shopping around to make sure that you get the best deal. It may even be worth having a different credit card for everyday use.


A money transfer credit card can be a useful means of transferring an existing loan to a lower interest rate, which can be as low as 0%. Doing so can allow you to repay an existing debt faster and cut interest payments.

However, it is crucial to factor in all fees when calculating whether to obtain a money transfer card. It is also prudent to repay the loan before the 0% interest rate period comes to an end, since money transfer credit cards may charge high rates of interest on new purchases.

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