Refinancing credit card debt can be a great way to pay off debt in a more efficient and cost-effective manner. It involves replacing high-interest credit card debt with a loan that comes with a lower interest rate and a repayment term. This can help you pay off your debt faster and potentially save hundreds of dollars in interest. Here’s what you need to know about how to refinance credit card debt in Australia.
What is Refinancing Credit Card Debt?
Refinancing credit card debt is a strategy that involves taking out a loan to cover your credit card debt while consolidating all of your debt into one single payment. Instead of paying the high interest rate associated with your credit cards, you would instead pay a single interest rate over the life of the loan. The lower interest rate makes it easier to pay off your debt faster.
Benefits of Refinancing Credit Card Debt
There are several advantages to refinancing credit card debt. Here are just a few of them:
Lower Interest Rates
Refinancing credit card debt usually means getting a loan with a lower interest rate than what you would pay with your credit cards. That lower interest rate can mean significant savings down the road.
Reduce Monthly Payments
By consolidating all of your credit card debt into a single loan, you can reduce your monthly payments. This makes it easier to manage your debt and stay on top of your payments.
Simplified Payments
With one loan payment to worry about, there’s no juggling around multiple bills each month. You can also easily keep track of the amount of principal you’re paying each month.
How to Refinance Credit Card Debt in Australia
If you’re looking to refinance credit card debt in Australia, here are the steps you need to take:
- Shop around: Start by comparing loan products from different lenders to find the best one for your needs. Be sure to look at the interest rate, loan amount, repayment terms, and fees.
- Check your credit score: You’ll need a good credit score to qualify for the best loan terms. Check your credit report to make sure it’s accurate and up-to-date.
Read more: How to Get a Debt Consolidation Loan With Bad Credit
- Check if you may be eligible for hardship assistance: The National Debt Helpline can help you find out if you’re eligible for assistance if you’ve experienced a financial hardship.
- Apply: Once you’ve identified the best loan option, submit your application. Most lenders will then assess your eligibility to determine if you qualify for the loan.
- Repay: Once approved, you’ll need to start making your regular loan payments to repay the loan.
Refinance Credit Card Debt After a COVID-19 Financial Hardship
If you’ve been financially affected by the COVID-19 pandemic, you may be eligible for assistance when it comes to refinancing credit card debt. In Australia, you can apply for hardship assistance if you’ve experienced a significant income drop or other financial difficulties. Some lenders may be able to provide payment suspensions, debt consolidation, or refinancing options to help make it easier to manage your debt.
Refinancing credit card debt can be a great way to save money on interest and simplify your debt repayment. At Peel Finance Brokers, we can help you find the best product to suit your needs. Contact us today for further assistance.
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Terry Boag is the founder and CEO of Peel Finance Brokers and has been providing professional and loyal service to the Mandurah and southwest area for 25 years. With a long history of financial experience, Terry is reliable and dedicated to his clients, always ensuring the highest customer service and delivering strong lender relationships.