What Is a Credit Card Refinance?
A Credit Card Refinance is another name given to a credit card debt consolidation loan. This type of personal loan enables you to pay off all your credit cards and, in turn, repay the amount you take out in monthly installments.
If you have several credit cards that you pay every month, you can lower your interest rate by applying for a Credit Card Refinance personal loan.
For example, maybe you have 6 credit cards that you have maxed out. You can apply for a personal loan for the amount you owe on all the cards and pay them off. In turn, you only have to pay off the Credit Card Refinance personal loan. Since you paid off the credit cards with the Credit Card Refinance personal loan, you have 6 fewer bills to pay.
You can apply for a Credit Card Refinance personal loan and reap some major advantages, provided you have a good enough credit score to qualify for a reduced APR.
If you are having a tough time meeting your current credit card bills, taking out a Credit Card Refinance personal loan with a lower APR will make paying off your debt cheaper. Once you find lenders that specialize in this type of funding, you can start making comparisons.
Credit Card Refinance: How to Get Started?
To apply for a Credit Card Refinance personal loan, you will need to take the following steps.
- Check Your Credit Score. When you apply for any type of personal loan online, you need to check your credit score first, as most of these loans are based on your credit rating. Obtaining your credit score will also assist you in determining the best APR for your credit range.
- Select Your Loan Type. Some companies specialize in Credit Card Refinance loans, so it is better to go through them if you want the best rates or benefits in terms of funding.
- Get Prequalified for a Credit Card Refinance. When you choose several lending providers you like, you will need to get prequalified. Doing so will give you the repayment details and reveal how much the APR for the Credit Card Refinance will be.
- Compare the Lenders. After you have had a chance to get prequalified through different lenders, you can review their terms and APRS, and see which one fits best with your lending needs. Since this is a Credit Card Refinance, it usually is best to choose the lender with the absolute lowest APR, as doing so will make getting the loan much more advantageous.
- Supply the Necessary Info and Documents. When you choose a lender, you will need to provide the necessary documentation and information. In this case, you need to supply the following –
- Personal Identification (Social security card, passport, or driver’s license)
- Proof of earnings or income (W-2s, paystubs, or filed tax returns)
- Employer information (Name of company, manager’s name, and phone number and address)
- Proof of residence (utility bill with your name and address or a lease agreement
- Apply for the Loan and Start Making Payments. After you apply for your Credit Card Refinance personal loan and start making payments, you might add some extra money to each payment each month to repay the loan faster. Doing so will make paying off your credit card debt simpler and faster.
Credit Card Refinance – What You Need to Know
To take out a Credit Card Refinance personal loan, you should be aware of the following terms:
- Annual Percentage Rate (APR) – The interest rate charged on a Credit Card Refinance personal loan, expressed at an annual rate. A credit card often features different APRs – one for purchases and another one for balance transfers.
- Application Fee – The amount a lender charges for processing a loan application and the related documents. These fees are usually non-refundable and may or may not be included in processing a personal loan.
- 3-in-One Credit Report – Also known as a merged credit report, a 3-in-One credit report shows your credit information from each of the major credit agencies, or TransUnion, Experian, and Equifax. The report shows the 3 credit scores side-by-side in an easy-to-digest format.
- Credit Card Refinance – A personal loan that allows the user to pay off his or her credit debt and pay back the amount with 1 simple loan payment each month.
- Charge-off – When a creditor or lender writes off the balance of a debt, no longer expecting repayment. This is also known as bad debt. A charge-off remains on your credit report for 7 years and therefore harms your credit score. After a debt is charged off, it may be sold to a collection agency to try to obtain payment.
- Balance Transfer – The process of moving some or all of an outstanding credit card balance to another credit card with a lower APR or special rate. Teaser rates are often featured for balance transfers. Because these low rates do not last, it is better to choose a Credit Card Refinance to relieve credit card debt.
- Balance Transfer Fee – The fee charged to credit card customers for transferring an outstanding credit card balance to another credit card.
- Debt Consolidation – Combining debts into 1 loan amount to pay off credit card debt fast and conveniently.
- Debt – The amount you owe on a credit card or loan.
- Principal – The amount of the loan proceeds.
- Loan Interest – The amount charged on the principal for a Cash Refinance loan.
- Default – The status of an unpaid account. An account is usually listed as being in default if it has several delinquencies (non-payments).
- Delinquency – A term used for late payment or non-payment – usually on a credit card account. Accounts are usually considered delinquent after 30, 60, 90, or 120 days, as most Cash Refinance loans are based on monthly payment cycles. Delinquency can stay on your credit report for 7 years and therefore can be damaging to your credit score.
Recommended Credit Card Refinance Lenders
SoFi (pronounced SEW-fi, which stands for Social Finance) provides a straightforward application and user-friendly site. Their low-fee personal loans make them a strong contender under the Credit Card Refinance category. Their unemployment feature allows you to stop loan payments if you lose your job. They also offer lower competitive rates than many personal loan providers, all of which bodes well for anyone wishing to take out a Credit Card Refinance loan.
Lending Tree is not a direct provider of Credit Card Refinance loans. However, the company is a good source to reference if you want to be connected with this type of personal financing source. Many of the lenders that LendingTree matches with applicants will work with people with less-than-glowing credit ratings. Therefore, visiting the Lending Tree site can help you investigate Credit Card Refinance personal loans further to obtain the best APR for your current credit score.
Credible allows you to compare rates across multiple loan providers through one application. The Credible platform is a good resource for Credit Card Refinance personal loans, making it attractive for anyone who wants to do one-stop shopping of loan packages. Customer testimonials rank the provider high in their services. Keep in mind that you will eventually be matched with a third-party lender, so you will need to carefully review the terms of the lenders with whom you wish to do business. Check out the site’s best rate guarantee.
Avant may be a newer player in the world of personal loans. However, it still is a standout choice for getting a Credit Card Refinance loan product. Avant offers customer service 7 days a week and does not charge fees for financing prepayments. Loans range from $2,000 to $35,000, and customers can receive funding by the next business day in their bank account. Plus, the Avant loan application process for a Credit Card Refinance is simple. All you need to do is provide your contact details and SSN, sign a contract digitally to receive your loan offer and wait for the funding to arrive in your bank account (usually the next business day).
Upstart represents a social lending platform that concentrates on helping people accomplish their financial objectives. The loan process is painless and fast, and all factors are considered in receiving a Credit Card Refinance personal loan, including your credit score, job history, earnings, and background. The site describes how their loans work, thereby answering any questions customers may have. You can also receive financial education on the Upstart platform. This can be helpful, especially if you have become burdened by credit card debt.