Financial Advice
Financial Advice
Out of context: Reply #39
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- monNom1
That's common. You hardly touch the principle in the early years of paying it off. If you want to know how much it costs a year just for the interest. Just multiply your principle (loan amount), by your interest rate.
For example. 100k would cost you. $100,000 x 0.0375 = $3,750/year or $312.5/mo.
Even if you are paying $500/mo. That's only $188 off of 100k. So it's not going to move much at first, but eventually it gets smaller and more of your payment goes toward the principle.
It's a curve rather than linear so the later years you're paying much more into principle than interest.
- Yeah. The balance ultimately shifts toward the principal but it takes sooooo long. Keep up with the big payments if you can. It does help.monospaced
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