December 07, 2021
Can You Refinance a Credit Card with a Business Term Loan?
One funding option you may want to consider is credit card refinancing with a business term loan. It can make the debt payoff process easier and give you the opportunity to save hundreds or even thousands of dollars on interest.
Although incurring credit card debt can be stressful, there are ways to pay it off and get your business finances back on track. In addition, there are many lenders that will provide funding to business owners with debt. In this blog post, we'll further explain what you need to know about credit card refinancing. By being aware of your options, you can determine how to best refinance your existing debt.
What is Credit Card Refinancing And How Does It Work?
Credit card refinancing is a debt consolidation method that can simplify the way you pay off your credit card debt. If you decide to take this route, you can take out a business term loan amount to pay off your credit card balance. There are several potential benefits of doing so including:- Lower Interest Rate: If your credit card debt has left you with higher interest rates than anticipated, refinancing it may save you a great deal of money.
- Reduced Monthly Payment: If you're struggling to make debt payments on-time, you might be able to choose a consolidation loan that has a long repayment term. A longer loan term may lower your monthly payments and free up your monthly cash flow. The caveat, however, is that you’ll pay more in interest payments in the long run.
- Combine Multiple Card Debts: It can be overwhelming to keep track of multiple credit card debts with various rates and payment schedules. By refinancing your debt, you can roll the debt from each of your credit cards into a new loan. You might also be able to consolidate other types of business debts. If you've refinanced your student loans, you may be familiar with how this process typically works.
Is Refinancing Credit Card Debt with a Business Term Loan a Good Idea?
If you’d like to refinance your credit card debt with a business term loan, you should be aware of the pros and cons that come with this debt refinancing option. Although you may think that refinancing is an immediate Before you move forward with refinancing your debt with a business loan, here are some steps to follow:- Review All Fees: Make sure that this strategy makes financial sense before you pursue it. Look at the “interest charge” or “finance charge” on your credit card bills, which is the cumulative fee you pay for carrying a balance beyond the grace period.
- Do Your Research: There are countless banks, credit unions, and private lenders that offer business term loans. Before applying we suggest shopping around to find the various options at your disposal. Compare the rates, terms, and fees of each loan option that you have.
- Keep Your Accounts Open: If you decide to refinance your credit card debt with a business term loan, you may be tempted to close your existing accounts. It’s in your best interest to keep them open, as closing them can take a toll on your credit score.