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if you pay off any existing debts such as personal loans and credit cards, you will reduce the amount of interest you are paying to financial institutions. Once paid off, you can put your excess cash-flow into savings products to boost your financial position. The interest rates on personal loans and credit cards tend to be a lot higher than the interest rate on your savings accounts, therefore it is a wise decision to make sure you are debt free before saving for your first home.
If you have borrowed $10,000 in the form of a personal loan at an interest rate of 12% you could be paying approximately $1,200 in interest every year, this interest is considered dead money as it is going straight to the banks! Paying this debt down before you start saving could help you in the long run.
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