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Brief moment of explanation. My family and I lost everything to Katrina. I've got a new job paying 43k/year, we're not exactly secure, but we're making it month to month. Our credit cards are maxed out (roughly 8k in debt) because we had to use them to get back on our feet. All of that said, we're receiving a $40k loan from SBA to be repaid over 30 years at a 2% interest rate. I've never taken a loan of this size, and am honestly intimidated by it.
My initial thoughts are to pay off the credit cards and just not use them aside from a small purchase every few months to show we can pay our debts and build a better credit rating. I'm tempted to make a 10-20k lump payment on the SBA loan just to get it off our heads. That may not be the best thing to do, though, given the interest rate. We could easily invest 25-30k of that.
I am NOT a financial wiz. My attitude has always been, build credit and don't spend what you don't have. This is an unusual situation, though.
Are there investment options any of you would recommend? We're looking at CDs, but potential shifts in the value of the dollar have me worried. We are in no way in a shape to pursue risky investments. If there is anything you might suggest which just makes good, common sense, I'd really appreciate the suggestions.
-fl
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