How Loan Payments Work:
Each monthly payment consists of two parts: principal (repaying the borrowed amount) and interest (the cost of borrowing). In the early months, more of your payment goes toward interest. As you pay down the principal, the interest portion decreases and more goes toward principal.

Factors Affecting Your Rate:
Your interest rate depends on several factors: credit score, income, debt-to-income ratio, loan amount, loan term, and current market rates. A higher credit score and lower debt-to-income ratio typically qualify you for better rates. Shop around with multiple lenders to find the best rate.

Secured vs Unsecured Loans:
Secured loans (auto, home equity) use collateral and typically have lower rates but risk asset loss if you default. Unsecured loans (personal, student) don't require collateral but usually have higher rates because they're riskier for lenders.

Tips for Saving Money:
• Make extra principal payments to reduce total interest
• Consider bi-weekly payments (26 half-payments = 13 full payments per year)
• Refinance if rates drop significantly or your credit improves
• Avoid extending your loan term when refinancing
• Round up payments to pay off faster