Penny Perspective

Good morning everyone! Due to the effects of Covid, some auto lenders are providing loan adjustments. One, in particular, is lowing interest rates and with that, lowering the monthly payment. If you’re in a position where you absolutely need to make a reduced payment, by all means, pay the reduced amount. But if you can, continue to make the same monthly payments. This is one way to accelerate your financial growth. When we have our financial life in order, we can take advantage of lower prices as a result of say a pandemic. This is what makes the statement “the rich get richer, while the poor stay poor” true. With a lower interest rate, and lower payments you may pay the same in total (in some cases you end up paying more) but the loan is being dragged out further. With a lower interest rate, making the same payments, you’ll pay off the auto loan faster and pay less in interest. Now if you are using the difference to apply toward something that will make you more than what the loan costs you, that’s a different story. Everybody’s situation is different. Apply useful information accordingly 😊. Stay encouraged!