When planning to borrow money, it’s important to understand the concept of interest. Basically, interest is the cost of borrowing money from a lender. Interest can be charged by a bank or credit union, or from LoanMart on their Car Title Loans Online. There are several different types of interest, and borrowers should understand the basic differences between simple and compound interest.
Simple interest is paid only on the total amount of the loan’s original principal, or the money originally borrowed. Simple interest is calculated by taking the original cost of the loan and multiplying it by the interest rate and the length of the loan, typically expressed in months.
Compound interest is slightly more complicated. This type of interest is the amount paid on the original principal of the loan, and on the interest charged previously. At the end of each year (if the interest is compounded yearly) the interest charged is then added to the original amount of the loan and recalculated.
Interest on Car Title Loans
The interest paid on Car Title Loans from LoanMart is amortized into the loan over a period of 12-36 months. This means that in the beginning, payments will mostly go toward paying down the interest, and will later be applied to the principal once the interest requirements have been met.
Amortization also means that there are no balloon payments or unexpected fees with our Auto Title Loans. Payments are set over a certain number of months, and a borrower will know what is expected to pay each month. Amortized loans make it easier to pay back a loan without coming up with a lump sum of cash in the future.
Consider the Benefits
If concerned about the interest on an Auto Title Loan, speak to a friendly representative at LoanMart.