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When to Refinance Credit Card Debt

Texas consumers should always consider all relevant factors before refinancing their credit card debt. The most important factor is whether they will continue to accumulate more debt in the future. If so, this could make it even harder to pay off the obligations. The next major factor in the decision is the difference between the credit cards' interest rates and the new interest rate under the personal consolidation loan.

Another big concern is how long repayment will take. If the consumer will be paying off all of the debt in a short time frame, the personal loan's origination fee may negate its long-term benefits. Consumers facing financial hardship or those with poor credit history may find it hard to refinance their credit card debt through a traditional financial institution. Peer-to-peer lenders may help people with poor credit histories, and credit counseling may be a viable solution for those facing financial hardship.

The main reason consumers choose to refinance their credit card debt is to consolidate them into a single loan with a single payment and a fixed interest rate. This makes repayment much easier and sometimes less expensive. It offers a set schedule for paying off their debt to keep them on track as long as they make their regular scheduled payments.

Many people with a large amount of credit card debt may be unable to refinance it for some reason, so they may need to choose a different option. For some this could be credit counseling, but for many the only solution is bankruptcy. Filing for bankruptcy can stop the collection calls and give the consumer a fresh start, but it is not right for every situation. A Houston bankruptcy attorney could assess a client's unique situation and determine if bankruptcy is an appropriate debt relief alternative.

Call today to schedule a case evaluation with our Houston bankruptcy firm.

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