Which finance to clear an expensive debt

2 min read

Costly borrowingThe problem

Refinance cheaperThe fix

Lower rate + scheduleThe gain

Spotting expensive debt

Some borrowing quietly costs far more than it should: a merchant cash advance priced on a steep factor rate, a carried card balance at a high purchase APR, or a short-term loan taken in a hurry at a poor rate. If interest is a heavy line in your outgoings and the balance barely falls, you are carrying expensive debt — and clearing it onto cheaper borrowing usually saves real money.

The routes to clear it

Route	Best for
Refinance	Replacing one costly facility with a cheaper one
Consolidation	Merging several debts into one lower-rate loan
Fresh loan	Clearing a specific expensive balance

A refinance swaps a costly facility for a cheaper one; consolidation merges several into one payment; a fresh loan clears a specific balance. All aim to cut the rate and give a schedule that actually clears the debt. Model the saving with the debt consolidation calculator. See how to refinance.

Then stop it recurring

Clearing expensive debt only helps if you do not rebuild it. After refinancing, avoid the easy-but-costly products that created the problem — reach for a transparent loan or line next time, not another MCA or a carried card balance. See one loan vs several facilities.

The Credicorp view

A single Credicorp business loan can refinance or consolidate expensive debt onto a transparent, lower fixed rate with a clear end date — cutting the cost and simplifying cash flow, with no personal guarantee. Register to apply. Educational content, not financial advice.

Frequently asked questions

How do I clear an expensive business debt?

Refinance or consolidate it onto cheaper borrowing. A refinance swaps a costly facility for a lower-rate one; consolidation merges several debts into a single payment; a fresh loan clears a specific expensive balance. All aim to cut the rate and give a schedule that actually clears the debt.

What counts as expensive debt?

Borrowing that costs far more than it should — a merchant cash advance on a steep factor rate, a carried credit-card balance at a high purchase APR, or a hurried short-term loan at a poor rate. If interest is a heavy outgoing and the balance barely falls, it is expensive debt worth refinancing.

How do I avoid rebuilding expensive debt?

After clearing it, avoid the easy-but-costly products that created the problem. Reach for a transparent loan or revolving line next time rather than another MCA or a carried card balance, and keep borrowing to affordable, well-priced facilities with clear end dates.