2. Interest Expenses

Interest is charged on your loan each month (or another pre-determined period). When calculating the interest charge, the amortization table shows you where to multiply the remaining loan balance by your monthly interest rate. This is especially important with long-term loans. When looking for a loan, it is usually best to find one that requires interest payments in the early years (as opposed to one that boasts “interest-free for 24 months!”).

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