"Dear Pay Dirt, Have a question? Send it to Kristin and Ilyce here. (It's anonymous!) I am 27 and looking to pay off as much debt as I can before looking to purchase a home. But there are some obstacles in the way. My parents never gave me sound financial advice when I was younger. And I have been financially independent since 18, which has lead to debt accumulation I could have avoided."
"I have $1,500 on a credit card with a 19.99 percent interest rate, $12,500 on a credit card with a percent interest rate (lucky to have a low interest rate but it made me irresponsible with spending on the card), and a personal loan balance of $9,000 (principal amount plus the interest) with an excruciating interest rate of 38 percent that I regretfully had to take in an emergency situation."
A 27-year-old earner makes $1,600 biweekly after taxes and can comfortably pay minimum debt payments because of low living expenses. The individual has a credit score around 660 and is actively working to improve it. Outstanding debts include $1,500 on a credit card at 19.99% APR, $12,500 on a second credit card with a lower rate, a $9,000 personal loan at 38% APR taken for an emergency, and $5,000 in student loans at 5% APR. The individual wants to consolidate the personal loan at a lower rate but fears a hard inquiry could harm approval and recalls a prior application when income was lower and a co-signer was suggested. The goal is to improve qualification for consolidation, pay down select debts before applying, and retain both credit cards.
Read at Slate Magazine
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