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If you’re trying to climb out of debt, transferring what you owe to a low-interest credit card or balance transfer card can be a good solution.
The good news is that many different types of debts can be transferred to your credit card. A personal loan balance transfer can be done, along with auto loans, student loans and even other credit cards.
The tricky part is that which types of debts can be transferred vary by issuer. For a personal loan balance transfer, for example, you can use Citi, Bank of America, Barclays, Capital One or Discover but not Chase or American Express.
Here’s the debt transfer policies you need to know from eight of the largest credit card issuers.
Taking out a personal loan can be a great way to consolidate debt or finance a large purchase. However the interest rates on personal loans can be quite high. This leads many borrowers to wonder – can I transfer my personal loan balance to a credit card to save on interest?
The short answer is yes, you can transfer a personal loan balance to a credit card in many cases. However, there are some important factors to consider before doing so.
How Balance Transfers Work
A balance transfer allows you to move debt from one credit card or loan to another credit card. Many credit card companies offer promotional 0% APR balance transfer offers as incentives to open a new card
During the 0% intro period which often lasts 12-18 months any balances transferred to the new card will not accrue interest. This can help you save a lot of money on interest compared to high-rate debt like personal loans or credit cards.
To do a balance transfer, you simply open the new credit card, then initiate a balance transfer by providing details of the account you want to pay off. The credit card company sends payment to your bank or lender to repay the loan or card balance.
Balance transfers typically come with a 3-5% fee. So on a $10,000 balance transfer you would pay $300-$500. But this is often much less than the interest you would otherwise pay, making balance transfers worthwhile.
Pros of Balance Transferring a Personal Loan
There are several potential benefits to transferring a personal loan balance to a credit card:
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Save on interest: The top reason to do a balance transfer is to reduce the interest rate you pay. Personal loans often have rates of 10-36%. Transferring to a 0% card saves substantially.
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Pay off debt faster: Lower interest costs mean more of your payment goes to the principal. This can help you pay off debt months or years faster.
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Consolidate payments: Combining multiple loan or credit card payments into one can simplify your finances. One payment is easier to manage.
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Improve credit utilization: Paying down balances can lower your credit utilization ratio, which can boost your credit scores.
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Access card benefits: Perks like rewards, purchase protection, and extended warranties may provide additional value.
Cons of Balance Transferring a Personal Loan
However, there are also some potential downsides to keep in mind:
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Balance transfer fees: Expect to pay a 3-5% fee to transfer your balance. So $5,000 balance would incur $150-$250 fee.
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Short promotional periods: 0% APR offers typically expire after 12-18 months. You need a plan to fully repay by then to avoid deferred interest.
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Penalty APRs: Miss a payment and you may lose the 0% rate and pay a high penalty interest rate. This can negate savings.
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Credit inquiries: Applying for a new card means a hard inquiry, which could temporarily lower your credit scores a few points.
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Higher monthly payments: To pay off the full balance in the promo window, your monthly payments may need to increase substantially.
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Accruing new debt: The temptation to use the card for new purchases could lead to added debt and interest charges.
Can All Personal Loans Be Transferred?
Most credit card companies allow balance transfers from personal loans and lines of credit. However, there are certain situations where a balance transfer may not be allowed:
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Same lender: You usually cannot transfer a balance from a loan or card issued by the same bank. The funds would simply move within the same institution.
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Secured loans: Balance transfers typically cannot be used to pay off secured installment loans or lines of credit backed by collateral.
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Business loans: Most credit card balance transfer offers are for consumer purposes. Business loan balances often cannot be transferred.
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Payday loans: Due to very high interest rates, payday loan balances are generally not eligible for credit card balance transfers.
If you are unsure whether your specific personal loan can be balance transferred, contact the card issuer to inquire about eligibility before submitting an application.
How to Choose the Best Card for a Balance Transfer
Since balance transfer promotional offers vary, it pays to shop around for the best deal. Here are some factors to look for in a balance transfer credit card:
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Long 0% intro APR period: Look for offers with 12, 15 or 18 month 0% intro periods to give you plenty of time to repay.
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Low balance transfer fee: Aim for cards with 3% or 4% balance transfer fees rather than 5% fees to maximize savings.
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High credit limit: Make sure your credit limit exceeds the balance you plan to transfer.
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No deferred interest: Choose a card where interest is not deferred and retroactively charged if not fully paid off during the intro period.
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Low standard APR: Review the rate after the intro period ends. You may carry a remaining balance beyond the intro term.
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Positive cardholder reviews: Research feedback from current cardholders to gauge customer service quality.
Also consider perks like rewards, purchase protections or bonus offers that provide additional value beyond the balance transfer terms.
Steps for Transferring a Personal Loan to a Credit Card
If you determine that transferring your personal loan balance to a credit card makes financial sense, follow these key steps:
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Check credit and loan eligibility: Confirm your credit score meets minimum requirements for approval and that your lender allows transfers.
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Compare balance transfer cards: Research options to find the best card for your needs with the lowest fees, rates and charges.
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Apply and get approved: Complete the credit card application. Approval may involve a hard credit inquiry that can temporarily drop your scores a few points.
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Activate card: Once approved, call to activate your new card and complete any other requirements to start using it.
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Submit balance transfer request: Provide your loan account number, payment address and balance to be transferred. The process may take several weeks.
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Pay off remainder: If your credit limit cannot accommodate the full personal loan balance, you will need to pay any remaining amount not transferred.
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Make payments: Be sure to make at least the minimum monthly payment by the due date to avoid fees and penalty APRs. Pay off the full amount before the intro period ends.
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Close old accounts: Once the balance transfer is complete and your loan paid off, you can opt to close your old credit card or loan account if you wish.
With some strategic planning, diligent repayment, and careful account management, transferring your personal loan balance to a credit card with a 0% intro APR could save you hundreds or thousands of dollars in interest. Evaluate the risks and benefits thoroughly, then proceed with caution.
Credit card issuers won’t allow debt transfer among their own products
One thing is universal among credit card issuers: You can’t transfer within their own families. And the “family” can extend to a long reach of affiliates.
You cant transfer a balance from one Citi card to another, for example, or from a Wells Fargo personal loan to a Wells Fargo credit card. Additionally, many banks issue credit cards on behalf of other brands, such as airlines, hotels and stores, and the same restrictions apply to accounts with issuers affiliates. For example, Chase is the issuing bank for the United℠ Explorer Card. If you had a balance on that card, you couldnt transfer it to a different Chase card.
Before choosing a card for balance transfers, make sure you know the affiliate relationships involved. For example, Citi, through its Department Store National Bank subsidiary, issues cards for scores of retailers. If you want to transfer a balance from, say, a high-interest Best Buy® card, you shouldnt bother looking at a Citibank credit card.
In most cases you won’t earn rewards on the balances that you transfer, either.
Rules for debt transfers by issuer
Can you balance transfer a loan? No. Balances from loans, like auto, student or home loans are not accepted. Transfer restrictions: Balance transfers are available for new accounts on select consumer card products within the first 60 days of opening. Only balance transfers from cards that were not issued by American Express are eligible. Customers balance transfer requests may be declined if any of their American Express accounts are not in good standing.
Can you balance transfer a loan? Yes. Customers can transfer balances from any credit cards, personal loans, student loans, auto loans or home equity loans from lenders other than Bank of America®, as well as gas cards, retail and department store cards. Transfer restrictions: Affiliate credit cards issued by Bank of America® are not eligible for balance transfer.
Can you balance transfer a loan? Yes. Eligible card members can transfer any loan, including credit card, personal, home equity, student and auto. Transfer restrictions: Eligible card members can transfer any credit card debt from cards in the Visa, Mastercard, American Express and Discover networks. Customers cannot transfer balances on cards issued by Barclays to another Barclays account.
Can you balance transfer a loan? Yes. Customers can transfer balances from other credit cards, personal loans, student loans and auto loans. Transfer restrictions: Customers cant transfer a balance from another account issued or acquired by Capital One or any of its affiliates or subsidiaries. The total amount of the balance transfer, including any applicable fees, cannot exceed the amount for which cardholders are eligible.
Can you balance transfer a loan? No. Customers can transfer only credit card balances. Transfer restrictions: Customers cant transfer balances from any other account or loan issued by Chase Bank USA, N.A. or its affiliates. Customers cant transfer more than $15,000, including fees and interest, within any 30-day period.
Can you balance transfer a loan? Yes. Customers can transfer credit card debt, personal loans, student loans, auto loans and home equity loans. Transfer restrictions: Customers cant transfer balances from other accounts issued by Citibank, N.A., or its affiliates. Additionally, customers cant transfer to the IRS. Balance transfer payments will process after the account is open for at least 14 days.
Can you balance transfer a loan? Yes. Cardholders can transfer debts including credit and store cards, student loans, medical bills, gas cards, and auto loans. Transfer restrictions: Customers cant use balance transfers to pay any Discover accounts. Customers can transfer any amount, up to their credit available for transfers, which may be less than their total credit line.
Can you balance transfer a loan? Yes. Customers can request balance transfers from various creditors and loan types. Terms and conditions apply. Transfer restrictions: Balance transfers are not available between accounts issued by Wells Fargo or any of its affiliates. Requests are only processed to validated creditors in the U.S. that can receive funds electronically.
BALANCE TRANSFER v. DEBT CONSOLIDATION LOAN – are any right for you?
FAQ
Can you do a balance transfer on a personal loan?
Is personal loan balance transfer a good idea?
Can I pay off my loan with a balance transfer?
Can you pay off a personal loan with a credit card?
What is the difference between a personal loan and a balance transfer?
Balance transfer cards let you move your credit card debt to a new card, and they often feature a 0% introductory APR offer for six to 21 months. Personal loans are fixed-term loans with set interest rates, and they can be used to pay different kinds of debts, not just credit cards.
Should I use a balance transfer credit card or a personal loan?
The choice between balance transfer cards and personal loans depends on your debt type and amount, repayment time and credit score. A balance transfer credit card allows you to move your high-interest balance onto a new card that typically offers an introductory period of 0% interest.
What is a balance transfer card & a personal loan?
Personal loans are fixed-term loans with set interest rates, and they can be used to pay different kinds of debts, not just credit cards. The choice between balance transfer cards and personal loans depends on your debt type and amount, repayment time and credit score.
Can a balance transfer help pay off a personal loan?
A balance transfer offer can help you pay off a personal loan and other high-interest debt, though it’s always a good idea to double-check your math to make sure your payments and timeframe will be manageable—and that you’ll actually save money.