When building a budget, we often plan in terms of monthly expenses, but it’s also important to think about the big picture and this is especially true if you’ve got debt and a poor credit score.
When people are trying to figure out how to pay off their debt, they usually look at how much they can afford to repay each month, says Shant Nicole Harris of Financial Common Cents. But you should also be looking at how much you’ll be paying total over the life of the loan. This is particularly important when deciding to take on new debt, like an auto loan or personal loan.
“Someone might know that 18% is a high interest rate, but they don’t really care,” says Harris. If the monthly payments work out to $450 per month, for instance, a bo…
Read the full article at: https://www.cnbc.com/select/budgeting-mistake-keeps-subprime-borrowers-in-debt-cycle/
