Help consolidating pay day loans
So if you’re thinking of paying off a loan early, here are a few questions you should answer for yourself first: If you are under a mountain of debt, building a savings account can seem like the least of your worries. Would you be prepared if you were to lose your job or get sick?Before you decide to pay off a loan early, make sure you at least have some sort of emergency fund first.Do you want to have a clear picture of just how much money you lose by paying minimum payments only? Alternatively, look at the top of the first page of your credit card statement.Issuers are now required to give you a minimum payment warning and some even show you how long it will take you to pay off your card while just making minimum payments.If it’s a student loan or mortgage, you probably are.Any other loans are probably not eligible for tax deduction unless you are using them for work.Other types of debt, such as home loans, auto loans, and student loans usually carry lower interest rates.
Credit cards are the only type of loan that unquestionably should be paid off early.Credit cards have notoriously high interest rates – higher than any other type of debt on average.It goes without saying that credit cards should be paid off first, before anything else.After you recover from your shock at the repayment term and the amount of money it ends up costing overall, remember that it doesn’t even include future purchases and balances added to your card.What this means is, since credit card interest rates are usually higher than other types of loans, you should almost always pay them off early if possible.