Sometimes you need to borrow money, especially to pay for a large purchase such as a home or a car. It’s easy to focus on your monthly loan payment but to appreciate how much borrowing money might really cost, you also need to consider the amount of interest you’ll pay over time. The following tables illustrate the total interest paid over the life of three common types of loans that have a fixed annual interest rate and a fixed repayment term: mortgage loans, auto loans, and personal loans.
Mortgage Loans
A home is often the biggest purchase you’ll ever make. Loan repayment terms vary; this chart illustrates the total interest paid over a 30-year repayment term.
| Loan amount | 3% | 4% | 5% | 6% |
|---|---|---|---|---|
| 250,000 | 129,444 | 179,674 | 233,139 | 289,595 |
| 350,000 | 181,221 | 251,543 | 326,395 | 405,434 |
| 450,000 | 232,999 | 323,413 | 419,651 | 521,272 |
| 550,000 | 284,776 | 395,282 | 512,907 | 637,110 |
| 650,000 | 336,553 | 467,152 | 606,163 | 752,948 |
| 750,000 | 388,331 | 539,021 | 699,418 | 868,786 |
Auto Loans
You may take out a loan to buy a new or used vehicle. Loan repayment terms vary; this chart illustrates the total interest paid over a 60-month repayment term.
| Loan amount | 2% | 4% | 6% | 8% |
|---|---|---|---|---|
| 15,000 | 775 | 1,575 | 2,400 | 3,249 |
| 20,000 | 1,033 | 2,100 | 3,199 | 4,332 |
| 25,000 | 1,292 | 2,625 | 3,999 | 5,415 |
| 30,000 | 1,550 | 3,150 | 4,799 | 6,498 |
| 35,000 | 1,808 | 3,675 | 5,599 | 7,580 |
Personal Loans
A personal loan is unsecured, meaning that no collateral is required, so the interest rate on this type of loan is typically higher than for a secured loan. Loan repayment terms vary; this chart illustrates the total interest paid over a 36-month repayment term.
| Loan amount | 6% | 8% | 10% | 12% |
|---|---|---|---|---|
| 8,000 | 762 | 1,025 | 1,293 | 1,566 |
| 10,000 | 952 | 1,281 | 1,616 | 1,957 |
| 12,000 | 1,142 | 1,537 | 1,939 | 2,349 |
| 14,000 | 1,333 | 1,794 | 2,263 | 2,740 |
| 16,000 | 1,523 | 2,050 | 2,586 | 3,131 |
If you have questions or need assistance, contact the Experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Disclosures: The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
