A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Interest RateThe percentage a lender charges you to borrow money, or pays you to keep money deposited, over a set period.
- AmortizationThe process of paying off a loan through scheduled payments that cover both interest and principal until the balance reaches zero.
- Installment LoanA loan repaid in fixed, scheduled payments over a set term, such as an auto loan, student loan, or personal loan.
- Extra PaymentA payment beyond your required amount that goes toward principal, cutting the total interest and time to pay off a loan.
- Loan TermThe length of time you have to repay a loan in full, which affects both your monthly payment and total interest paid.
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Plain-English education — not personalized legal, tax, or investment advice.