Why You Should Pay Off Credit Cards Before Financing a Home
As of December 2018, credit card debt in the U.S. totaled $1.04 trillion. If you owe money to credit card companies, your part of this growing statistic. You’ve probably fantasized about being able to pay it off quickly. Although it’s not without its risks, applying for a personal loan might provide you with that solution.
It’s important to pay off debt first so that you can afford a large mortgage loan payment. When you’re ready, work with reputable bad credit home loan lender to obtain a mortgage loan at an advantageous rate. Here are some tips on how to get there.
What’s a Personal Loan?
A personal loan gives you access to discretionary funds you can use to pay off your credit cards. Because they’re usually unsecured, you don’t have to put down collateral to get the loan. Getting a personal loan at a better rate than you pay to the credit card company helps you consolidate and pay off the debt quickly.
0 APR Balance Transfers
Once you’ve improved your credit scores enough to get a 0 percent introductory APR, you should consider transferring a portion of your debt to the new card to help pay off more of the principal. This takes planning and discipline, so only try this if you’re willing to track and shuffle around your debt until it’s paid off.
Get to the Root Cause of Your Debt
Applying for 0 percent interest offers and taking out a personal loan can save you money. However, if the root cause of your debt is impulse spending and other bad choices, you’re going to have to adopt a lifestyle that aligns with your income so that you don’t continue to drown in debt.
