Balance transfer

I got Visa cheques in the mail with a low-interest rate of 1.99% until the end of May. Right now the interest rate on my personal loan is 7.24%. Obviously saving 5.25% in interest each month is appealing, but the credit limit on my Visa is only $2,000 and the loan is just under $4,000.

So our options are: use $2,000 in savings to pay down the loan and then transfer OR keep paying the loan as we have been, and then transfer when it is down to $2,000.

The difference in interest is going to save us more than any money we'd make by keeping that $2,000 in savings. BUT, there's the always important emotional side of things. Husband and I both like having a nice cushion in the bank. What if one of us lost our job tomorrow? Or what if I got pregnant? Or if an emergency happened? Sure we have the beginnings of an emergency fund, but it's not that much right now, so that general savings account is our cushion. This is money that we'll be putting towards a house one day. Not anytime in the near future, mind you, but it's there and right now, it's our piece of mind.

So, do we keep our piece of mind and keep chipping away at the loan until it's down to $2,000 (which will be in February) or do we pay that $2,000 now and transfer immediately? We're definitely both sitting in the camp of the former. I like logging on to the bank balance and seeing that we have money. Maybe because it's still a novelty after being in debt for so long, but whatever the reason, I like the feeling and plan to keep that for as long as possible.