Hard times can happen to anyone. You could lose your job unexpectedly. You could lose a loved one and have to shoulder their burial expenses if they haven’t prepared. Also, unexpected changes in the economy can cause you to lose investments suddenly. 

Have you ever been in a position where you feel like you are drowning in debt and there is no way out? It can be mentally overwhelming to fall on hard times. Don’t let these hardships bog you down, and try not to stress too much. 

Millions of people have been in similar situations, but there are easy steps you can take to take charge of your debt and climb back up the ladder to financial freedom again.

Before you make any big life-changing decisions, take the time to understand what credit card refinancing means.

Refinancing means taking debt that you already have accrued and found ways to pay it off under different terms. Getting lower payments or better interest rates is your goal. 

There are several ways to refinance your debt. Not all solutions work for everybody's situation. Again, taking plenty of time to understand your options. Figuring out how much more or less you would pay in added fees is the goal. 

Personal Loans 

Getting a loan from a bank or local accredited lending institution can help you consolidate your debt into one payment. Personal loans have no stipulations, unlike home equity and auto loans. 

Figure out how much you can take out a loan and how much of your debt you can cover. Focus on the interest rates and try to find a loan with a lower interest rate than your lowest credit card. 

If you can save money by paying one bill vs. paying several different credit card companies, you have successfully refinanced your loans. This will help alleviate so much stress and make your monthly payments feel manageable, as well as making a payoff goal seem attainable.

Equity Loans 

Taking a loan against your equity means putting up your possessions as collateral. You can take out equity loans against anything of high value, but cars and homes are two of the most common objects used as collateral. 

Use this loan to pay off your credit cards if you could pay less to your equity loan than your credit card companies. 

The danger here is that if you cannot pay your loans on time, the bank would then own the collateral. This is where being very diligent and sticking to a budget is incredibly important. A budget will not only help you step your way out of debt, but it will help you hang onto essential assets like your home or other equity items.

Build a budget by first cutting extraneous purchases. Plan when your family will do their new clothes shopping instead of shopping each week for something new. Cut out dining out and fast food and instead take the time to prepare meals at home and take your lunches with you.

Have any subscription services? Calculate what you could save if you cut out streaming services and subscription boxes for three months and make a pact to go and enjoy the library offerings (they even have some free streaming services) and get outdoors and play with something they haven’t played with in months. Challenge them to become an expert in it in three months.

Transferring Your Balance

This method is one of the more popular because of its simplicity. Transferring your balance means paying off your credit cards with other credit cards. 

Many credit cards offer the first year or more with 0% interest. You can take advantage of this and make it easier to pay off your principal balance. Be sure to check and compare monthly payments. 

Some credit card companies specialize in this and are focused on absorbing smaller credit cards to reduce costs. 

401K

The last option, and the least appealing, is using your retirement to pay off debt. You usually lose money if you pull it from retirement accounts early, but if this is less than you are paying in interest over time, then it is worth it. 

In conclusion, you can take several easy steps towards regaining financial freedom and refinancing your credit cards. Don’t hesitate to begin looking at your options and start making a plan that will work for you. Most of all, stick to your plan.