Credit

The Cost of Credit

The Cost of Credit
 
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

 
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