If you’re looking for more financial freedom this Fourth of July, here are a few ways to help pay down debt quickly. (iStock) If you’re kicking back by the pool, grilling burgers and contemplating how to become more financially independent this Fourth of July, paying down debt is a great place to start. In today’s economy, low interest rates have created multiple avenues for Americans to become debt-free sooner than by just making their monthly credit card payments. Paying off debt affects your credit, increasing your available credit and allowing you to improve your financial wellness journey in multiple ways. Here are five debt strategies to help you pay down debt this Independence Day: If you want to start on the road to more financial freedom, contact Credible to speak to a loan expert and see what options are available to you. PAYING OFF YOUR DEBT – 5 STRATEGIES TO DO IT QUICKER AND EASIER Take out a cash-out mortgage refinance A cash-out refinance allows homeowners to possibly obtain a lower interest rate while also drawing cash out of their home equity, and use it for other things like home renovations or payoff plans like debt consolidation. Most mortgage lenders require homeowners to have at least a 20% equity stake in their home, but as home prices rise, that level is getting easier to reach. Tappable equity – the amount of equity homeowners can borrow while still maintaining at least 20% equity in their homes – increased by 8% annually in the first quarter of 2020 to a record high of $6.5 trillion, according to data and mortgage solutions company Black Knight. The company's report also showed that 90% of homeowners with such equity would also benefit from refinancing their mortgage, meaning they have rates above the current national average. If a cash-out refinance fits your debt management plan and you want to see what your refinance options are, visit Credible to compare rates and loan options from multiple mortgage lenders at once. Refinance your student loan Federal student loan holders are currently in period of forbearance as a result of the coronavirus pandemic, meaning they don’t have to make payments until September. Private student loan holders, however, have had to continue making payments. Those with private student loans are also ineligible for student loan forgiveness, so paying off their loans is often the only option to help eliminate such debt. Student loan refinancing can help lower the interest rate on your loan, therefore reducing your monthly payments made to interest and allowing you to use the money saved to pay more toward the principal balance. You can also pay off your debt by changing the terms of your student loan. With refinance rates at historic lows, doing so could significantly impact student loan holders’ ability to pay off debt faster. Visit Credible to view a rates table and compare multiple student loan lenders at once. REFINANCING STUDENT LOANS? HERE’S THE CREDIT SCORE YOU’LL NEED Find better interest rates It's always a good idea to shop around for the best interest rate, regardless of whether it's for a personal loan, student loan, auto loan, home loan or even a credit card. Many loan applicants don’t realize that there's an opportunity to shop for better rates, even after getting prequalified with a lender. When you're shopping around among multiple lenders within a short period of time for loans needed for large purchases – like an auto loan or a home loan – your credit score won't be affected. Those inquiries will be grouped together as one hit on your credit report, and could potentially save you thousands of dollars in interest over the life of the loan. Take out a personal loan for debt consolidation Personal consolidation loans can help pay off high-interest credit card debt, lower your interest rate and put you on a path toward paying down debt in a pre-determined amount of time. Record-low interest rates are minimizing the amount you pay each month in interest through a personal loan. If you choose a consolidation loan option, it's imperative to be cautious so you don’t continue to use the new available credit, or you could end up in a worse position financially. If you are interested in seeing your personal loan options, visit Credible to get prequalified in minutes without affecting your credit score. 5 SMART WAYS TO CONSOLIDATE CREDIT CARD DEBT – AND 5 YOU SHOULD NEVER DO Look into a balance transfer credit card Similar to a personal loan, balance transfer credit cards also remove debt from high-interest cards. But these cards typically offer a sign-on bonus of 0% interest for the first six to 18 months, giving you time to pay down debt before charging you the regular credit card interest rate. Users should be cautious with this option, because new purchases will begin accruing interest quickly, and not having debt paid off during the 0% interest rate period will also begin accruing interest once that period ends. Visit Credible if you want to compare various balance transfer credit cards, the rates and terms of each, and apply for the one that best fits your financial needs. Beginning to pay down debt this summer can be a critical step to help put you on the road to financial freedom. There are various tools that can help you get started – like transferring your debt balance, which is paying off debt from one credit card using a new credit card with 0% interest for the amount paid off, or taking a cash-out mortgage refinance using your home's equity. Visit Credible to speak to a loan expert and get started today. Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column. Source: Read Full Article