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THE BENEFITS OF REFINANCING YOUR DEBT
When you refinance your debt, your debt
does not increase. In fact, you are not adding a penny to your debt.
You are just relocating it.
The table below details the 'before' and 'after' of your credit card
debt and refinancing.
|
Credit Card Debt Before
Refinancing |
Credit Card Debt After Refinancing |
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--Multiple Cards = Multiple Payments,
Interest Rates and Due Dates
--High Interest Rates |
--All of credit card debt is combined into
one payment, to one lender.
--Lower Interest Rates |
Enjoy the Tax Benefit!
You can write of all of your credit card interest on your tax
return when you
refinance to consolidate your debt! A good idea is to calculate
what you would save from the tax benefit and use these funds for
making payments.
You are Debt Free! But Be Careful!
When you refinance your credit card debt, you are wiping out the
balances that you owe on all of your credit cards. You now have a
clean slate of credit to use. Be careful! You definitely do not want
to fall into the trap of putting yourself back into debt by
overusing your credit cards again! Try and think twice before you
start charging goods and services on your credit cards! Bottom line,
stop using your credit cards! Learn more
about
controlling credit card debt.
If you do start using your credit cards again, try
and not use them to the point where you can not afford to pay your
balance in full, every month. If you start building balances, you
are going to wind up paying a great deal of money on interest rates
again, defeating the purpose of consolidating your debt by
refinancing.
Unfortunately, many people that refinance to consolidate debt do
repeat their unwise financial cycle and eventually end up in over
their head in credit card debt. At the very least, when you
refinance you give yourself a temporary piece of mind that you are
debt free and in control of your finances.
When you get set to refinance you'll want to find the right loan and
also set a timetable for having the loan paid off as soon as
possible. When I say getting the loan paid off as soon as possible,
I mean at least paying off the old debt before you rack up another
round of credit card debt that you'll need to refinance.
More
Refinancing to Consolidate Info:
 Is refinancing a good idea for you and your family?
Preparing for Refinancing
Ensuring a Speedy Refinance Process
Learn How to Eliminate Debt By Yourself!
Refinancing to Consolidate Guide |
