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Refinancing offers debt management options

Before they apply for personal loans to refinance their credit card debt, people in South Carolina should take stock of their situations and be aware of the pros and cons of this option. While these loans may help them to pay off debt incurred because of emergencies, medical bills or college expenses, refinance loans work better for some people than they do for others. For example, individuals who are likely to pay off their loans within the next year might choose to avoid refinancing. To get this type of loan, they would need to pay origination fees of anywhere between 1 and 5 percent, which could mean that they end up paying more than they owed originally.

However, refinance loans can help individuals who have multiple credit cards at different interest rates. Debtors with interest rates of 15 to 25 percent could potentially obtain lower interest rates, one monthly payment and a fixed payment schedule through refinancing loans. Usually, they pay a fixed amount over 36 to 60 months with these types of loans.

Refinancing can help debtors to become more disciplined, but it tends to be a better option for people who don't plan to incur future debt. If they do, they could end up paying a great deal more than they originally owned in credit card debt. For people dealing with hardship, credit counseling or debt renegotiation may offer a better solution for debt management.

While refinancing can be an option for some people with credit card debt, bankruptcy may be a better option for people with unmanageable amounts of debt. With Chapter 7 liquidation or Chapter 13 individual debt readjustment, debtors are able to completely erase or secure new payment plans for their credit card debt. Their income and debt amount may have a bearing on the type of bankruptcy for which they qualify, and a bankruptcy attorney may be able to help debtors throughout the filing process.

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The Huggins Law Firm, PA

Columbia Office
1812 Lincoln Street
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Columbia, SC 29201

Phone: 803-764-1558
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