NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.

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

Can I transfer a loan to a 0% credit card?
Image source: Getty Images

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.

Discover which credit cards you could be eligible for now

Use our free Credit Card Eligibility Checker to discover which credit cards you may be eligible for. It only takes a few minutes and will not affect your credit score!

Find out what credit cards you could be eligible for now

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.

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.

Could you be rewarded for your everyday spending?

Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. MyWalletHero makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.

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.

How these 5 credit card ‘must-knows’ could help you…

We all know that a bad credit history makes it hard to borrow money – but did you know that improving your credit score could also help secure lower interest rates on credit cards, saving you hard-earned cash?

Find out how you could improve your credit score, and your credit-application chances, with our free report “5 Things To Know Before You Apply For A Credit Card”.

Just enter you best email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.

Was this article helpful?

Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.