For a standard fixed-rate amortizing loan, monthly payment depends on principal, interest rate and repayment term. A lower monthly payment does not automatically mean a cheaper loan.
Why term matters
A longer term usually reduces the monthly payment but gives interest more time to accumulate. Compare both monthly affordability and total repayment.
What to compare
- APR or applicable rate.
- Monthly payment.
- Total interest and repayment.
- Lender fees.
- Fixed versus variable rate.
- Prepayment conditions.
Zero-interest case
With a genuine 0% rate and no financing fees, payment is principal divided by the number of payments. Always use the actual contract for an important borrowing decision.
Useful calculators
Important: Use current bills, tariffs, quotes and contracts for important decisions.