How Loan Payments Work
Understanding how loan payments work is crucial to making informed financial decisions. When you take out a loan, you're borrowing a specific amount (the principal) and agreeing to pay it back over time with interest.
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Frequently Asked Questions
How is my monthly loan payment calculated?
Your monthly payment is calculated using the loan amount (principal), interest rate (APR), and loan term. The formula ensures you pay the same amount each month.