When you’re buried in credit card debt, it can seem like a hopeless situation, but fear not, because you’ve got options.
Refinancing credit card debt is one of the fastest ways to get your head back above water, and is a process that allows you pay off your existing credit card debt by taking out a new loan.
When you refinance credit card debt, your debt isn’t wiped out, but simply transferred to a new loan, oftentimes with new conditions (like a new interest rate, new loan term, and new payment schedule).
Sometimes, refinances can reduce your monthly payments, making it significantly easier for you to get those sent in on time and avoid late fees, or even defaults.
The objective of refinancing your credit card debt is to secure a better debt situation than the one you’re currently in.
Count All of Your Debt
How much debt do you really have?
Do you owe money on a car, a television or student loans? Take an inventory of all of your debt, including the amount of money you owe on all of your credit cards.
These days, most Americans are carrying a significant amount of debt on their credit cards, which makes consolidation and refinancing an attractive option.
Debt consolidation is the process of taking multiple loans and combining them into a single new loan, allowing you to simplify the process of getting out of debt, since you’d only have one payment to one lender.
It’s only worthwhile to consolidate loans that have high interest rates, or which have higher interest rates than what you’re being offered for the new consolidation loan, so be careful about signing up for any and all debt consolidation offers.
You’ll want to retain any loans with low interest rates, since those are relatively cheap. The first step to refinancing your credit card debt is to determine which loans need to be consolidated (if any), and which loans you want to refinance at all.
Budget
Budgeting is the key to making any credit card debt refinance work in the long run.
Once your debt has been refinanced, you’ll still need to keep up with monthly payments, and setting an effective budget is the best way to do that.
When creating your budget, start by using at least six months’ worth of data to figure out how much you’ve been earning, and spending, each month.
Determine where you can make cuts on nonessential expenses, and allocate whatever money you’re able to save toward paying off whichever debt of yours has the highest interest rate.
When looking to refinance your credit card debt, be sure to get quotes from a few different lenders so you can compare interest rates, then choose the option that’ll save you the most money over time.
Possible Penalties
Paying off your current debt in one lump sum may come with pre-payment penalties, so be sure you won’t be hit with excessive fees by pursuing a refinance, or the process could end up costing more money than it saves.
These penalties should be expressed in your initial credit card contract, but if you can’t find them yourself, then call your lender to ask if any fees would apply should be pursue a consolidation or refinance.
When calculating whether or not the refinance process will save you money, don’t forget to include the amount of fees that you’ll be facing.
Seek the Best Lender
Start looking for a lender who’s willing to combine your debts and offer you the lowest possible interest rate.
Most people start by checking out opportunities online, since it’s faster, doesn’t require travel, and allows you to collect details without a lot of logistical headaches, but sometimes the best deals are only available in person.
Talk to banks and credit unions in your area to see if they can help, but no matter who you end up choosing as your new lender, be sure to ask questions about how the process works, what fees you’ll be facing, and what interest rate you’ll be charged.
Pick a lender who you trust, and not just whoever offers the lowest rates!
Consider all of the Factors
Remember, your interest rate is not the only factor that goes into determining the costs of your loan.
Make sure to take into account fees, penalties for late payments, and other costs associated with paying off your credit card debt early, because you may end up finding out that a refinance costs more than it saves.
Car Capital Financial
Want to pay down that credit card debt, but not eligible for or not interested in refinancing it?
Consider a secured personal loan from Car Capital Financial instead.
We’re Southern California’s premiere car title loans company, and have offered our safe, affordable and reliable title loans to SoCal residents for over 15 years.
Our secured personal loans will help you pay off credit card debt, and can be offered in as little as 30 minutes from receiving your first phone call. Title loans are issued based on the borrower’s ability to repay the loan.
With far less paperwork than a traditional credit card refinance, our loans are significantly easier than to obtain (we don’t even require a credit check!) so call us today to find out what we can do for you.
Best of all, we won’t require you to leave your vehicle with us, refrain from driving it, or place any limitations on its use, so you’ve got nothing to lose!
Call us now at 1-888-500-9887 to get the cash you want in as little as 30 minutes.