Freedom From Payments
As we prepare to celebrate our independence as a nation, we would like to encourage our members to also celebrate the ways they are - or can be - financially independent and debt free. If you are still working toward financial freedom due to an auto loan or mortgage payment, there are several small changes that you can make now that could save you years of payments and potentially hundreds of dollars.
The first word that comes to mind with debt management is often "refinance." Refinancing a loan simply means either revising your payment schedule or replacing your original loan with a new one with a better interest rate. While this may seem like a good idea initially, refinancing large loans like your mortgage comes with fees that may reduce the value of making the switch.
If refinancing is not your best option, consider increasing the amount of your monthly payment. Making a small financial sacrifice to put more toward a loan payment doesn't sound like any fun, of course, but what about saving a few hundred dollars? That definitely sounds appealing! Let's look at a few specific examples.
If you have a $20,000 auto loan at 6% interest and a monthly payment of $350, paying an extra $50 a month would reduce your repayment time by nine months and save you $55 in interest. But what if you could increase your payment by $100? That would reduce your repayment time by seventeen months and save you $218 in interest!
For a mortgage, the numbers can be even more dramatic. If you have a $100,000 mortgage at 4% interest and a monthly payment of $850, paying an extra $200 a month would reduce your repayment time by thirty-five months and save you $1,378 in interest!
If you are stretched to the limit right now and can't afford to make additional payments in these amounts, don't let it stop you. An extra $20 a month here and there still adds up. This principle also applies to credit card debt, student loans, and whatever else is keeping you from celebrating your financial freedom. Call 370-5670 to speak to a Greenville Heritage loan officer to see if refinancing your loan is a good option! If you're not where you want to be yet, let this be the year that you make a change. In the meantime, celebrate your successes, big or small! Happy Independence Day!
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