Loan Details
Total Cost Breakdown
Yearly Amortization
| Year | Principal Paid | Interest Paid | Ending Balance |
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Affordability Planner
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Loan Comparison Tool
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Understanding Loan Concepts
What is Amortization?
Amortization is the process of spreading out a loan into a series of fixed payments over time. With each payment, you pay off a portion of the interest accrued for that month, and the remainder goes towards reducing your principal loan balance. Early in the loan, most of your payment goes to interest. Later, most goes to principal.
Principal vs. Interest
Principal: The amount of money you originally borrowed. This is the core debt you need to repay.
Interest: The cost of borrowing the principal, charged by the lender as a percentage (the interest rate). This is the profit the lender makes from the loan. Our charts show how much extra you pay in interest over the life of the loan.
APR (Annual Percentage Rate)
APR is the total yearly cost of a loan, expressed as a percentage. It includes the interest rate PLUS other fees like loan origination fees, closing costs, etc. This makes APR a more complete measure for comparing loan offers than the interest rate alone.