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Refinance Credit Card Debt with a Personal Loan
If you refinance your credit card debt, you pay off high-cost credit card balances with another loan that has a lower interest rate. You save money due to the lower interest rate on the new loan versus the old credit card balances.
Benefits of Credit Card Refinance
- Save on interest rates by paying off high-cost credit card debt
- Repay your outstanding debt balances faster by making a monthly payment on a finite repayment schedule
- Improve your credit score by decreasing your credit card utilization rate
- Fix your monthly payment and interest rate to prevent rate and payment increases (credit card debt normally has a floating interest rate)
What is Credit Card Refinancing?
Personal loans are a great way to refinance credit card debt, especially for borrowers with strong credit scores. By paying off your credit card balance with a personal loan, you decrease your credit utilization which can increase your credit score. Given personal loans are typically loans with 2 to 5 year repayment terms, you may be able to repay your outstanding balances faster compared to simply making the minimum payment due each month on your credit card.
Many people are seeking to reduce their credit card debt and manage their debts more effectively. A fixed rate personal loan can offer substantial savings to credit card borrowers that may be paying in excess of 18% interest. Particularly for strong borrowers who can access personal loan rates as low as 6.99%, there is a compelling case to refinance credit card debt and pay off with a lower cost personal loan. Lendvious works with top providers of personal loans to deliver multiple options to refinance your credit card debt.
Credit Card Refinancing FAQs
If you’re looking for a way to reduce your credit card debt or better manage it, then credit card refinancing is definitely a smart move. Credit card refinancing is all about consolidating your high-interest credit-card balances into one low-interest loan/card, thereby saving money and reducing your overall debt. So, if your goal is to save on the interest amount and payoff your credit card debt faster, then credit card refinancing is certainly what you need.
You should be aware that a credit card refinancing loan does not make you debt-free. It is merely the means to build a future free of credit-card debt. Just like any other loan, this loan also carries an interest, and comes with a fixed repayment period within which you are required to pay it off. So, while this loan can reduce your monthly burden to a certain extent by lowering the interest you pay, you will still have to pay a fixed amount to the lender every month.
The credit score requirement for credit card refinancing loans may vary from one lender to another. Some lenders accept a FICO credit score as low as 600, while others look for a minimum score between 640 and 660. At Lendvious, we work with multiple lenders who accept a wide range of credit scores.
Yes, it is possible to get a personal loan to pay off your credit cards. However, this option will benefit you only if you get a personal loan with an interest significantly lower than what you have been paying on your credit cards. Applying through Lendvious allows you to explore personal loans offered by the top providers that we work with. It gives you the opportunity to compare best rates and pick one that can considerably lower your financial burden.
You have the option to negotiate with the lender to lower the interest on your credit card. While this will certainly help you save money and pay-off your debts faster, this may not be possible with some lenders. On the other hand, a credit card refinancing loan gives you the option to lower your interest burden by allowing you to switch to a new loan with a much lower rate of interest.
Getting rid of credit card debt is not an overnight process. It takes time and sincere effort on your part. Here’s how you can minimize the burden, prevent further debt, and work towards becoming debt-free:
- Minimize expenditure
- Avoid overusing your credit cards and pay cash whenever you can
- Negotiate with the lender for a lower interest to help pay-off your debt faster
- Do not miss payments
- Pay-off the cards with the highest interest, first
- If your monthly payment is too high, opt for a credit card refinancing or debt consolidation loan, preferably with a much lower interest
- Check Your Loan Offers with Lendvious for the best loan offers from top lenders to refinance your credit card
Applying for a credit card refinancing loan through Lenvious will not have any impact on your credit score. However, once you choose the lender for the loan, the lender checks your credit report. Although this may cause a temporary dip in your credit score, the merits of taking a credit card refinancing loan outweigh this minor drawback, and make it entirely worthwhile.
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