A Lower Interest Rate Doesn’t Make a Debt Go Away | Dave Ramsey Quotes about Money

Lowering the interest rate on a debt does not make the debt itself disappear. It simply means that you will be charged a lower rate of interest on the outstanding balance. While a lower interest rate can help make the debt more manageable by reducing the amount of interest you need to pay over time, the principal amount of the debt remains the same. To illustrate this, let's say you have a debt of $10,000 with an interest rate of 10% per year. If you make no payments, the debt will continue to exist and accumulate interest. However, if the interest rate is reduced to 5% per year, you'll pay less in interest each year, but the $10,000 debt will still need to be repaid. To eliminate a debt, you typically need to make regular payments toward the principal amount, in addition to any interest charges. By consistently paying down the principal over time, you can reduce the overall debt and eventually pay it off completely. It's worth noting that lowering the interest rate can make it easier to manage the debt and accelerate the repayment process. It can potentially reduce the total amount of interest paid over time, allowing you to become debt-free faster. However, it's important to maintain a disciplined approach to repayments and consider other strategies, such as budgeting, reducing expenses, or increasing income, to effectively eliminate the debt. https://kcapitals.online/dave-ramsey-money-quotes/