As Gas Prices Rise, Here Are 3 Ways To Make Room In Your Budget
Supply chain issues are driving the prices of consumer goods at a breakneck pace, and fuel costs are no exception. The national average price of gas rose to $ 3.38 for the week of Oct. 18, according to AAA data. These are the highest gasoline prices since September 2014.
As the US economy slowly recovers from the depths of the pandemic, demand for gas is robust, but supply is tight.
Drivers fear average gasoline prices will continue to rise, but AAA spokesman Andrew Gross said $ 4 a gallon at the pump “can be a long way.” This is because as the hurricane season draws to a close, the risk of a weather-related price hike decreases.
Increased driver demand and high crude oil prices are contributing to high gas prices, Gross said. But reports that the United States has resumed negotiations on the Iran nuclear deal have pushed the price of barrels of crude oil down, which could ease some of the pressure on supply.
âCheaper oil, lower price at the pump,â he added.
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Over the past week, gasoline prices rose the most in North Carolina and Florida (+14 cents per gallon), followed by Arizona (+12), Rhode Island and New York ( +11). Average gasoline prices have risen by more than a dollar over the past year, causing drivers to pay almost $ 20 more to refuel their vehicles on average.
Fortunately, it may be possible to make room in your monthly budget by refinancing your existing debt on better terms. Borrowers can save over $ 600 per month on average by setting a lower rate on their credit card debt, mortgage, and student loans.
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3 ways to cut monthly expenses amid rising fuel costs
Higher gas prices can wreak havoc on your monthly budget. It’s not impossible for some commuters to pay $ 100 more in monthly ground fees compared to the same period a year ago. If you are looking for ways to cut spending from your budget, you may be able to save hundreds of dollars per month by refinancing your existing debt. Here are some options to consider:
- Consolidating Your Credit Card Debt Can Save You $ 66 Per Month
- Refinancing Your Mortgage Can Save You $ 304 Per Month
- Refinancing Your Student Loans Can Save You $ 253 Per Month
Learn more about each refinance option in the sections below.
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1. Consolidate your credit card debt
High interest credit card debt is a heavy burden on your budgetary, since interest interest compounded daily when you do not pay off the entire statement balance. This is why many consumers choose to consolidate their credit card balances into a more predictable personal loan.
Personal loans are unsecured lump sum loans that you pay back in fixed monthly installments over a set period of time. This can get you on a debt repayment plan that’s easier to follow, and can even save you money over time, thanks to lower interest rates.
The average rate on interest-rated credit card accounts was 17.13% in August 2021, according to the Federal Reserve. In contrast, the average rate on a two-year personal loan was 9.39%. If you can get a lower interest rate on a personal loan, you may be able to pay off your credit card debt faster and save money each month.
According to Credible’s estimates, consolidating credit card debt into a personal loan can save borrowers $ 66 per month on average. They can also save almost $ 2,400 over the loan.
You can see what type of personal loan rate you qualify for in Credible’s online marketplace. Use a personal loan calculator to estimate your monthly payment to determine if this financial strategy is right for you.
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2. Refinance your mortgage
Mortgage rates have risen over the past month, but are still relatively low, according to data from Freddie Mac. There may still be time to lock in a 3% mortgage rate on your home loan, which can save you money in the long run and on your monthly mortgage payments.
A September 2020 report from Black Knight found that the average consumer could save at least $ 304 per month by taking advantage of lower mortgage rates. Depending on the mortgage interest rate you may qualify for and the length of the loan you choose, you may also be able to reduce your mortgage payments.
Get prequalified on Credible to see your estimated mortgage rate without affecting your credit score, and use a mortgage calculator to determine how much you can save in your monthly budget.
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3. Refinance your student loans
Refinancing a student loan is when you take out a new private loan to pay off your current student loans at a lower interest rate. Refinancing your student debt can help you lower your monthly payment, pay off debt faster, and save money on interest charges over time.
A recent analysis from Credible found that well-qualified student loan borrowers who refinanced for a longer loan term were able to save over $ 250 on their monthly payment, all without increasing the overall cost of borrowing on the loan.
Keep in mind that refinancing your federal student loans would make you ineligible for certain protections such as income-tested repayment (IDR), COVID-19 administrative forbearance, and student loan waiver programs. But if you have private student loan debt, you have nothing to lose by refinancing at a lower interest rate.
Use a student loan refinance calculator to see if this option can help you balance your budget. If you are still not sure whether refinancing for a private student loan is right for you, contact a knowledgeable loan officer at Credible who can walk you through the process.
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