Who doesn’t like buying things, and if you are using your credit cards loans from different finance companies than you might be going into a substantial debt quickly. People going in debt from various companies may think about taking a consolidated loan and while this is not a new thing, but people still have to be pretty cautious as they might fall into a trap while repayment process can be confusing.
In this article we will see few aspects of credit card refinancing that can be pretty beneficial if you carefully implement them while taking action against debts and consolidating loans.
1. Use balance transfer credit cards and take unknown benefits
By opening a new balance transfer credit card you get the benefit of offers like 0% interest for a specific time of a year of may be 18 months, and a consolidated approach will take away the tension of paying to multiple finance companies. Still always read all the new documents on opening such new cards that transfer your previous balances.
2. Avoid making new purchases on your new balance transfer card
I should say, never make new purchases, as this will not only give you a dent in principal balance but it also means your initial planning to pay off the debt isn’t properly strategized. If you want to buy new things, then use cash whenever possible, until you have completely paid off your remaining debt.
3. Take Debt Consolidation Loans
To keep your financial planning upright, you can also choose to consolidate any credit card debts with a new single loan. This way is only best for you if you get a lower interest rate by doing so. This can be achieved with good credit scores and be knowing what things are involved like fees and any penalties while clearing loans at an early stage.
4. Say NO to Home Equity Loans
Don’t ever take consolidated credit card debt against home equity. The risk it too much as if you can’t pay the debt in time, you may lose your home as well. This is always considered to be dangerous, and you never know if a financial emergency will prevent you from paying debts.
5. Make a Repayment Plan
Sometimes you have to find a balance between paying debts and saving amount for future use. As you may be tempted to return the loan partially, but you are giving every percent of your income towards paying your loan. The best method would be taking bits of advice from a financial advisor as they will help you understand financial emergencies in future.
I hope above tips on refinancing will help you go debt free and I look forward to your comments below.