Total Cost of a Loan The total cost of a loan is the total amount sent to repay the loan. Total cost includes the principal and all interest paid over the length of the loan. Total cost also includes any fees charged.
Cost of Credit The cost of credit for a loan is the difference between the total cost and the principal.
You can use the information from the online loan calculator shown above to find the total cost and the cost of credit for the given loan after 60 monthly payments of $386.66.
table with 2 rows and 1 column , row1 column 1 , cap totalcostequals60 . middle dot , dollars386 . .66equalsdollars23comma199 . .60 , row2 column 1 , cap costofcreditequalsdollars23comma199 . .60minusdollars20comma000 . .00equalsdollars3comma199 . .60 , end table
TEKS 8(1)(A), 8(12)(A), 8(12)(B)
Unlike a car loan, a credit card loan does not have a set term or require fixed monthly payments. Before you make a purchase with a credit card, you may want to use an online loan calculator to plan a budget of monthly payments to pay off the loan.