Many people think about a loan in terms of their monthly payment. Instead, the total cost of the loan matters. For example, if you reduce your monthly payment by taking out a longer loan, you will pay more in interest over the life of your loan.
Sample loan amount: $20,000. Interest rate: 4.75%.
The numbers have been rounded to the nearest dollar.
When thinking about your overall financial costs and monthly expenses, it’s also important to keep in mind the monthly cost of insurance as well as the routine and unexpected.