With the economy in a slump and prices on the rise at gas pumps and grocery stores, Jean says many Americans are feeling the pinch. In this weak economy, many callers have serious financial questions, and Jean offers some answers.
I owe $3,000 in payday loans. How do I get out of this high-interest debt?
Jean says payday loans are never a good option because the interest rates are incredibly high. "Most people end up paying the payday lenders $40,000 over the life of their career—the interest rates are criminal in my opinion," she says. Jean shares three ways the caller can start to eliminate the payday loan debt:
Do I have to pay to see my credit score?
- Eliminate every bit of nonessential spending.
- Put your economic stimulus payment toward the payday loan.
- Try to work overtime or pick up an extra job to pay off the loans faster.
While you can go to the website annualcreditreport.com* to get one free credit report once a year, you do
have to pay to get detailed information and your actual credit score
, Jean says. "There is a package of all three [credit bureaus'] scores combined with all three reports that I think is somewhere around the neighborhood of $40," Jean says. "If you are just buying an individual score with a diagnostic, it is about $14."
I want to pay off my $30,000 in student loans quickly, but I also want to save for a home—which should I focus on?
Jean says the caller should focus on both, but only pay what is due every month on the student loans and put any extra money into savings. "At the very least, you'll have a substantial emergency cushion," Jean says. "You can always make a bigger payment to your student loan down the road if you get a bonus or something else and you have already bought the home."