Before you take out a loan, you should make sure that you understand the true cost of the loan. Depending on various factors, the total cost of your loan as well as the monthly payments could fluctuate throughout the term. Understanding the numbers that go into calculating this figure can save you from paying more money than you originally intended.
The loan cost is the total of the interest, closing costs and various fees in addition to the amount that you borrow. Consider the following scenario. Someone borrows a $100,000 loan with a static interest rate of 6 percent and agrees to pay it back over the course of thirty years.
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