Worked example: £5,000 of card debt
A 3% fee on £5,000 is £150.00. Moved to a card with 0% for 24 months and cleared in that time, the payment is £214.58 a month and the whole cost is the fee. A 9.9% APR loan over three years costs £160.11 a month and £764.02 in interest. The balance transfer costs £614.02 less.
Paying only the loan's payment
If you pay the transfer card only £160.11 a month, the loan's payment, £1,307.32 is still owed when the 24 months end and the card then charges its standard rate, 24.9% APR in this example. The card clears in 33 months, costs £274.60 in fee and interest, and still costs £489.42 less than the loan.
A shorter offer reverses this. With a six-month offer and the same £160.11 payment, £4,189.33 is left at the end, the card costs £1,768.05 and the loan, at £764.02, is cheaper by £1,004.03.
When each one tends to win
A transfer card suits a debt you can clear inside the 0% period, because the cost is only the fee. A personal loan suits a larger debt, a longer repayment time or a debt of several kinds, because it gives a fixed payment and rate. Experian and Aqua both make the same split. A card can only take the balance of other cards and is limited by the card's credit limit; a loan can cover several debts.
Many offers apply only to transfers made soon after you open the card; Experian says this is usually within 60 days, so check the terms. Both routes usually involve a search on your credit file, so an eligibility check first is worth doing.
How the numbers are worked out
The transfer card takes the debt plus its fee, charges the promotional rate for the promotional months and the standard rate after that. The loan is a level-payment loan. Both are compared on total cost: fees plus interest. By default UK APRs are treated as effective annual rates under FCA CONC App 1.2, so the monthly rate is (1 + APR)^(1/12) − 1. On £5,000 at 9.9% APR over 36 months this gives the £160.11 a month that Moneyfacts publishes for the same loan. The APR convention field can divide every APR by 12 instead, as many UK sites do: the same loan is then £161.10 a month, and the balance transfer card saves £649.65 on the default example, against £614.02 on the default basis.
To see what a transfer saves against your current card, use the balance transfer loan calculator.
To compare a loan with leaving the debt on a card, use the credit card vs personal loan calculator.
Use the right country page
This page uses UK terms, pounds and, by default, the UK effective APR convention. For a US comparison, with a minimum transfer fee, a loan origination fee and the nominal rate convention, choose United States above the form. Inputs reset and amounts are not converted.
Inputs for the UK balance transfer vs personal loan calculator
APR convention
Applies to every APR on the page, the card rates and the loan. Effective APR (FCA) is the default and follows the FCA APR rule. APR divided by 12 is how many UK sites work and gives a slightly higher monthly rate.
Debt to clear
The card debt you want to move or pay off, before any fees.
Balance transfer fee
A percentage of the debt moved, added to the new balance.
Promotional rate and period
The rate on the transferred balance during the offer, and how many months it lasts.
Card APR after the promotion
The rate on whatever is left once the offer ends.
How you would pay the transfer card
Enough to clear it inside the offer, or only the same monthly payment as the loan.
Personal loan APR and term
The APR on the loan quote and how many years it runs.
CALCULATOR QUESTIONS
UK balance transfer vs personal loan calculator questions
Is a balance transfer cheaper than a personal loan?
When you can clear the debt inside the 0% period, usually. On £5,000 the transfer costs £150.00 in fees and the loan £764.02 in interest in the example.
What if I cannot clear the card in the 0% period?
The balance left is charged at the card's standard rate. With a six-month offer and the loan's payment, the example card costs £1,768.05 against £764.02 for the loan.
Can a balance transfer move other kinds of debt?
A balance transfer card moves card debt; a personal loan can pay off several kinds of debt, according to Experian.
Do both affect my credit file?
Both usually involve a search when you apply, and an eligibility check can show your chances first.
Which rate convention does it use?
By default the UK effective APR convention in FCA CONC App 1.2. The APR convention field switches to APR divided by 12, as many UK sites do.