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Can I transfer a home equity loan from my bank to a credit card offering a lower APR. My banks says no.? |
Is it possible to transfer my home equity loan balance ( $10,000 at 8.25%APR) thru my bank to a credit card with a lower APR ( say a Balance Transfer Card at 1.9 % APR for 18 months). My Bank says NO....not without a cash transfer. Why not? I have excellent credit and this would save me from paying interest for a year and a half. By then, almost all of the $10,000 would be paid too ( I put in about $700 a month). Any advice? A home equity loan is a secured loan backed by your property. Most credit card transfers specify the consolidation of credit card debt or other unsecured debts. The bank and the credit card company will not let this debt convert. They would accept cash which essentially relives the secured debt and makes it a personal, unsecured debt. If I were you, I would look around and see if someone would refinance the loan for you at minimal or no closing cost. Remember after that 18 months the terms change substantially and the equity loan interest is tax deductible and the credit card is not. Shop for a new loan, with a better rate. Is the credit card and loan with the same company?If so whats the incentive for them? Lost money? Try combining different companies on the transaction or just get a new loan somewhere else. You probibly can get a personal unsecured loan for the pay off at lower interest, state it is for home improvement. If your bank says no, the answer is no. Why not? Because they hold the loan and can dictate terms. Also because you can transfer the balance, but how is the bank to be paid? Banks don't accept credit cards as 'payment.' And, you can, after charging it, issue a charge back. If the bank were set up to accept these payments, a credit for the full amount would have to be issued. They are simply covering their proverbial butts. On the other hand, if you do a cash transfer, they will have been paid cash - a currency they do accept. Bottom line - you can't do it because the terms of your loan prohibit it. If the credit card offers checks to make payments and transfer balances with, why can't you make the payment to the bank with the balance transfer check? Or, write the check to yourself, deposit it, and write a check to the bank. Of course the bank said no because they don't want to lose all that interest you would be paying them. I had a mortgage years ago and I can't even remember what the name was but I transferred the balance to a Chase credit card with a low APR. I think any credit card will be willing to loan you the money. If you have one of those pamphlets from a credit card company, try calling and asking them. Keep calling different companies until you find one that suits your needs. I would also look into your bank as well for penalties for early payoffs. Some banks do, do that. Good luck! Eliminating high interest credit cards by transferring to a card with a lower rate can help you save a great deal of money, allowing you to regain control of your finances. However, it is important that you understand all of the terms and conditions of your new credit card before committing enrollment. You want to make certain that the card offer is fair and that you are truly going to benefit from it. Featured are tips that will help you choose and use the right credit card for transferring balances. Pre-determining interest rates Most balance transfer offers are good for only the first 6-9 months of enrollment. At the conclusion of the introductory rate, the card will convert to a more standard rate, typically between 14-20%. It is important that you determine what the interest rate is going to be once the intro rate is over. If you are not sure what interest rate the card is going to be charging at the conclusion of the intro offer, call the issuer and find out. New purchase interest rates don't equal the balance transfer rates The intent of transferring credit card balances is to obtain a lower interest rate and eliminate your debt quicker. It is important to note that the balance transfer interest rate is not going to be the same for new purchases made with the credit card. In fact, new purchase rates are going to be higher. Also, payments that you make towards your credit card bill are going to be applied towards the balance transfer debt first, until they are eliminated. As a result, you are going to end paying a lot of money in interest costs for new purchases. It would be wise for you to pay off all of your balance transfers prior to making any new purchases with your credit card. Read more about it at: http://www.credit-card-gallery.com/artic... |
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