For most people it’s impossible to avoid debt completely. Few Americans can pay cash for a home or a child’s education. Everyone, however, can make sensible decisions about how much and what kind of debt is necessary and manageable. Fortunately the three factors that influence the impact of compound interest — the amount borrowed, the term of the loan and the interest rate paid — are those over which we can exercise some measure of control. Investing the time to shop for the most favorable terms, borrowing only the amount needed and paying it down quickly will save you money by minimizing the interest you pay.
John Spoto is the founder of Sentry Financial Planning in Andover and Danvers. For more information, call 978-475-2533 or visit www.sentryfinancialplanning.com.
This article is for general information purposes only and is not intended to provide specific advice on individual financial, tax, or legal matters. Please consult the appropriate professional concerning your specific situation before making any decisions.