Credit & debt · Module 6 of 8
Changing the deal you already signed
Your debt isn’t set in stone. Negotiating, refinancing and consolidating, and what each one costs.
Key terms in Changing the deal you already signed
- Refinancing
Refinancing is taking out a new loan to pay off and replace an existing one. Borrowers do it to change the interest rate, the loan term or the type of loan. The new loan has its own costs and terms, so a lower payment can come with a longer repayment period and a different total cost over the life of the debt.
Source: Consumer Financial Protection Bureau, Should I consolidate or refinance my student loans?
- Debt consolidation
Debt consolidation rolls several debts, such as credit card balances or loan payments, into one new loan with a single monthly payment. It simplifies repayment but does not erase what is owed. The Consumer Financial Protection Bureau cautions that introductory rates can expire and that a longer repayment timeline may increase the total paid.
- Debt settlement
Debt settlement is an arrangement in which a creditor agrees to accept less than the full amount owed. It is offered by for-profit companies that charge fees to negotiate on a borrower’s behalf, and borrowers may also try it directly. Results are not guaranteed, nonpayment during negotiations can bring added charges, and forgiven debt can create tax obligations.
Every term on Lever is in the money glossary.
About this module
Changing the deal you already signed is part of Credit & debt, one of 15 subjects in Lever. It’s a short run of 5 lessons, about 13 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
More in Credit & debt
-
1
What a balance actually costs
How credit cards charge interest, when carrying a balance is free, and when it starts costing you every day.
9 lessons -
2
The number they look you up by
What your credit score is, what goes into your credit report, and the habits that move the number most.
8 lessons -
3
What a loan is made of
Where each loan payment goes, the fees hiding outside the rate, and how to compare two offers fairly.
7 lessons -
4
Which debts are worth it
Secured versus unsecured debt, borrowing that builds something versus borrowing that doesn’t, and loans built to trap you.
7 lessons -
5
Clearing what you owe
Two proven ways to pay off debt, the cheapest and the easiest to stick with, plus how balance transfers work.
6 lessons -
7
What the loan actually bought
When a car or a degree loses value faster than the loan shrinks, and how to avoid owing more than something is worth.
7 lessons -
8
Paying in pieces
Buy now, pay later and interest-free instalments: when they’re really free, and when they get expensive fast.
5 lessons
Try this module
It’s part of Credit & debt. Lever will bring it to you when you’re ready, or you can go straight there.