What portion of my payment is interest vs. principal?

Payments are made towards interest first. The first payments on the loan will be majority interest repayment and, over the life of the loan, the principal decreases. Therefore the portion of the payment that goes to principal increases.

Interest accrues on the principal only, not on interest.

If the borrower has a 12% annual interest rate, their monthly interest rate is 1%. (1/12th of the annual interest rate).

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