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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.
Transferring debt from a personal loan to a credit card can seem like a good idea. Credit cards often offer 0% introductory APRs, allowing you to save on interest payments. However, this strategy can backfire if you don’t have a solid payoff plan. Here’s what to know about transferring personal loans to credit cards.
Overview of Balance Transfers
Balance transfer credit cards allow you to move debt from other accounts onto the new card. The goal is to take advantage of a 0% promotional APR. During this intro period, all your payments go toward the principal balance instead of interest.
This can help you
- Save money on interest
- Pay off debt faster
- Simplify bills by consolidating balances
Almost any type of debt is eligible for balance transfers depending on the card issuer. Common options include
- Credit card balances
- Personal loans
- Auto loans
- Student loans
- Home equity loans
However, the best debts to transfer are those with higher interest rates. This maximizes your potential savings.
Can You Transfer a Personal Loan?
Many lenders allow you to transfer personal loan balances to a new credit card. However, policies vary by issuer. Here are some top issuers and their rules on personal loan transfers:
- American Express – No personal loan transfers allowed
- Bank of America – Allows personal loan transfers
- Capital One – Allows personal loan transfers
- Chase – Does not allow personal loan transfers
- Citi – Allows personal loan transfers
- Discover – Allows personal loan transfers
- Wells Fargo – Allows personal loan transfers
Before submitting a balance transfer request, contact the card issuer to confirm its policy. Make sure your personal loan is eligible.
Should You Transfer a Personal Loan to a Credit Card?
Just because you can transfer a personal loan doesn’t mean you necessarily should. It depends on your financial situation.
Pros
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Pay no interest – Credit cards offer 0% intro APRs on transfers, allowing 12-21 months of no interest. Personal loans charge ongoing interest.
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Faster payoff – Making payments during a 0% intro period lets you pay down principal faster without racking up interest fees.
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Consolidate bills – Transferring personal loan debt simplifies finances by letting you manage just one monthly payment.
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Improve cash flow – Lowering interest costs frees up more room in your budget for other goals.
Cons
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Temporary offer – 0% APRs end after the intro period, then regular APRs apply. The average credit card interest rate is over 19%.
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Higher long-term rates – Personal loans often have lower regular APRs than credit cards. Transferring balances could increase long-term interest costs if not paid off in full.
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Fee costs – Balance transfers typically come with a 3-5% fee based on the amount moved over.
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Loss of protections – Personal loans offer more legal protections than credit cards in some cases.
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Credit damage – Maxing out cards with transfers can lower your scores if balances remain high.
As you can see, it’s a trade-off. The 0% intro APR can provide short-term savings. But you must be confident you can pay off the full balance before regular APRs kick in. Otherwise, you may end up paying more interest than if you kept the personal loan.
Tips for Transferring Personal Loan Balances
If you decide transferring a personal loan to a card makes sense, here are some tips:
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Shop around – Compare cards to find the longest 0% intro APR offers. Look for low balance transfer fees.
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Check terms – Make sure the card allows personal loan transfers and that your account qualifies. Understand when the 0% rate ends.
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Have a payoff plan – Create a realistic budget to pay off the full balance well before regular APRs begin. Factor in any fees.
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Pay on time – Make at least the minimum payment every month to avoid interest charges or penalties. Set up autopay to stay on track.
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Avoid new purchases – Don’t use the card for new transactions so you can focus all repayments on the transferred balance.
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Pay extra when possible – Making payments above the minimum can help you pay off the balance faster and avoid deferred interest.
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Credit check – Balance transfers require a hard inquiry, which could temporarily lower your credit scores. But on-time payments can offset this over time.
Weigh the Pros and Cons Carefully
Transferring a personal loan to a credit card with a 0% APR isn’t automatically the best approach. It requires a close look at your entire financial situation. While you could save substantially on interest in the short-term, it’s not without risks.
Set realistic expectations about your ability to repay the full balance before regular APRs kick in. Otherwise, you could end up increasing your interest costs over the long run. Have a payoff plan and budget in place before moving forward with a balance transfer.
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.