It’s time to break this cycle.
- A recent survey reveals that debt has a negative impact on consumer health.
- Finding an effective way to pay off yours could get you out of debt faster.
- Taking out a personal loan or cash refinance could be the solution.
There are certain types of debt that are somewhat unavoidable. Most people, for example, can’t buy a house outright, so they take out a mortgage and pay it off over time.
This shouldn’t necessarily be a source of stress. But credit card debt is a whole different story.
Credit card debt is considered an unhealthy type. This is because credit cards are known to charge high interest rates. Plus, too much credit card debt could hurt your credit score. This, in turn, could make it more difficult to borrow the next time such a need arises.
But credit card debt isn’t just bad for your finances. It could also be bad for your health. In a recent survey by Self Financial, almost 35% of adults in debt regularly lose sleep over it. It is not a good thing.
If you are in debt, it pays to develop a plan to get rid of it as quickly as possible. Here are some options to consider.
1. Perform a balance transfer
A balance transfer won’t erase your debt, but it could make it much less expensive to pay off. If you are able to transfer balances from your existing credit cards to a new card with an introductory APR of 0%, you will receive a break in accrued interest for a period of time. This could help you get out of debt faster.
2. Take out a personal loan
A personal loan allows you to borrow money for any purpose. At first glance, you might think that a personal loan won’t do you much, since you’re simply exchanging one type of debt for another. But the advantage of taking out a personal loan is to take advantage of a much lower interest rate on your debt. If you use your loan balance to pay off your credit cards, you may find it easier to reduce it.
3. Perform a cash-out refinance
If you own a home, it may be possible to pay off your credit card debt without increasing your monthly mortgage payment too much. A cash refinance allows you to borrow more than the remaining balance of your home loan. And if you qualify for a much lower interest rate on your mortgage than what you’re currently paying, you might be able to refinance in a way that lets you pay off your credit cards while virtually keeping the same monthly housing payment you used. for.
Even if you end up with a higher mortgage payment after doing a cash-out refinance, you’ll usually get a much lower interest rate on a new mortgage than what even a cheaper credit card will charge you. So, all things considered, you’re looking for a more affordable way to pay off your credit cards.
Persistent debt can change your outlook for the worse. It can also lead to a situation where you stay up at night worrying about how you are going to pay it back. If you have more debt than you think, consider using one of these strategies to get out of this cycle sooner. Your health could depend on it.
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