Home page

How Principal u0026 Interest Are Applied In Loan Payments | Explained With Example

Frames How Principal u0026 Interest Are Applied In Loan Payments | Explained With Example

Description How Principal u0026 Interest Are Applied In Loan Payments | Explained With Example

Comments How Principal u0026 Interest Are Applied In Loan Payments | Explained With Example

I understand that the interest payment when the loan balance is £100,000 is £6000 per year and therefore £500 per month brbrBut how is that extra 9955 decided? Do banks arbitrarily decide what the payment towards the principle starts at?brbrEdit: i think i just figured it out as i was posting this comment So the amount you pay towards principle is calculated on how much would need to be paid in order for £100,000 to be paid off in 30 years at 6 Got it Comment from : @rudy8409

Despite consistent efforts to save, invest, and pay off my high-interest mortgage, my portfolio has been significantly impacted by recent economic volatility I'm seeking guidance on the most prudent course of action: should I continue investing in the current market or explore alternative investment strategies Comment from : @AnnieHolsen

This is better than the real estate financing class that I took for my real estate license 😆 👍🏼👍🏼🙏🏼 Although my real estate finance class explain some finance ideas this really broke it down, I actually learned something from it cuz the real estate finance class just tells you basic ideas and percentages but this one really breaks down amortization Comment from : @ppa1983

Point being it's all a rip off Comment from : @chrisf4948

damn they got the math all figured out Comment from : @inoiz8395

How did you get 59995 for the monthly note Comment from : @ifaifa982

Finally, a video that makes sense! Comment from : @saifmohammed1481

Thank God for computers!! An amortization schedule is a great tool Comment from : @TruthBeTold-y9u

For all the people who are surprised by what you pay The video explains this process of paying towards principle so you pay less interest in the long runbrbrYou need to find an amortization calculator to figure out what extra payments will give the most decreasebrI had a friend that paid their mortgage 11yrs early They sent every tax return and bonus to principle And they rounded up their payment it was like $372, but they just paid $400 That extra bit made a huge impact as well Comment from : @liciewhiteley7376

Is this what is known as reducing balance? Comment from : @femiogungbade8832

Thanks for 30k subscribers Comment from : @PunamBagum

awesome videomade understanding how loans work so easy Comment from : @ssingh8166

Never ending interest should be illegal as fuck Comment from : @DawsonDeadEye

I love my multifamily properties Great passive income Comment from : @passiveincomeac

Predicting the housing market is difficult, as it depends on how effectively the Federal Reserve can reduce inflation and interest rates without causing a significant drop in demand for homes and other goods Comment from : @AnnieHolsen

Thank you for explaining that!❤ Comment from : @jeannettedickson3646

I’m just impressed this guy can write backwards! Comment from : @andretatesIII

It all a racket Comment from : @JimJones-r1e

Simply put,, im fed Comment from : @israelendalk

How did you come to this math? How is the formula done? Comment from : @DrGriff2000

So interest is just as criminal as taxation Comment from : @GodxMischief

when do you realize the 6 inteest? In the 30th year? Comment from : @1992loran

How to applicate on simple interest? Comment from : @MuhammadRezqyGhifari

Wow thats the Bank Version, but the reality is reverse The last payment is $2 for the principal and $596 is the interest so your loan balance is $2 and you have to pay it for $596 gotcha Comment from : @jinkynuqui8500

That’s right if you get a home loan for 30years 7 interest in paying more than a double of the loan amount Comment from : @BestGlass-xi8cw

This video helped a lot Comment from : @JustARegOleHoodNiqqa

Highway robbery!!! So if i buy a house at 750 grand i will have to pay an extra 826 grand!! That's loan shark shit!!!! Comment from : @chrismilton3895

And this is why you need 30 years to pay off a mortgage brbrHomes are not built to own they were built for banks Comment from : @KEN-du2iz

If there’s a minimum wage paid to the federal government will go variable to to a maximum fixed rate Comment from : @Bournechris640

Should I include the points to the principal? Let's say 200,000 plus 3 of points fee, so I have 206,000 as principal? Comment from : @lidig3636

Is this man writing backwards? Comment from : @sensiblecougar2723

What i want to know is how he made this video with the marker and all that cool stuff PLEASE id love to know 🤣 Comment from : @ThomasRaad

So if you already made 50-75 of the payments as schedule it will be pointless to start making additional payments or pay it off in full because the bank already got almost all of the interests money off from you?? The point of making extra payments or paying it off early is to reduce the amount of money paid to interests but if the bank almost got the interests money entirely by the halfway or 3/4 mark, might as well just ride out the loan term? Even at the start of the loan, any extra payments i made is being taken to pay interests and the bank doesn't allow any extra payments to go into principal only Comment from : @lespaulguitarist92

I just came to this video and fuck ,so basically i get a loan for 5000 dollars for a 29 wish is crazy high but on top of that my end payment is 10,900 120 more instead of 29 is this even fucking legal they told me my end payment would be like 7500 Comment from : @cocosgarage6768

THANK YOU Comment from : @the21stcentury

i hate this i hate accounting i don't know why i'm going to school i feel like i have to start over Comment from : @arisu229

Thank you, because a bank here trying to rip me off!!!!!! Comment from : @shocolaterdson9565

What if we change numbers of year does it make any difference Comment from : @quickwitted26111

Awesome Comment from : @Norecords1398

But why they take more interest amount instead of principle amount is it a strategy??? Comment from : @decentgamer4728

Yes but how did you arrive at the 599? Comment from : @simonlarson7230

So I have a situation with this company called Fairstone I make all my payments on time and they take their interest and the rest goes towards the principal I’ve been making additional payments in between scheduled payments and I noticed they’re taking half of the additional payments towards interest I thought anything additional would only go towards the principal to help pay down the interest in the long run Comment from : @jasondowling9296

thanks this helped me a lot Comment from : @living_in_fullidentity3417

How did he get the 599 montly payment? Comment from : @alexrosales8212

Are you writing in mirror image? 😮 Comment from : @VaishnaviDeshmukh

How did u reach the sum 599 at the start Comment from : @25_mansikothari26

You're an idiot if you're figuring out handwriting backwards listen to a loan explanation Comment from : @MarthaDenes

I’m 29 years old and never really understood how mortgage interest worked until watching this Crazy that they don’t teach this stuff in school Comment from : @seancarroll7244

Can you do a video on what happens to the extra amount when you pay back more than the agreed $59955 per month eg if you pay back $700 per month Comment from : @CITV08

How can you calculate when it’s half interest and half principal Comment from : @ld7096

Thank you for making this so clear and simple! Comment from : @mansfieldfamily5389

Can I get in contact with you Comment from : @redsavage

To the point! Great job! Comment from : @bluesapphire7548

That really made it make sense to me Now I'm trying to figure out if you're writing backwards 😮 Comment from : @harleydad1975

Are we all going to ignore how perfectly he wrote backwards?! Comment from : @THExONExMEXICAN

Great video I believe they don’t teach this in school, because it’s in their best interest for us to not know this Comment from : @germanium1872

Thank u sir so much as a banker it was much needed information Comment from : @sahilchoudhary7155

nobody in my school thought me this thank you uncle Comment from : @abhishekvanenooru2869

First I was here to learnbut now Im wondering how he writes in inverted way to the cameragreat presentation Comment from : @solok304

Thank you for this video, however, is there any way to find the 18th-month payment details without actually doing the 17 payment calculations? Comment from : @hardik2292

Maybe mine is so hard to judge because I pay earlier than the monthly due date some times by a day, some times by a week Comment from : @lingofearth2786

My bank is showing accrued interest on top of my mortgage payments? why would they be charging extra interest on payments that are already covering principal and interest? Comment from : @roccodimiccio5199

Thanks for explaining this man😅😅brbrAnother one of those vital things they never taught me at school! Comment from : @vimalb88

I'm very much satisfied! You are super great writing backwards on the board! Love it! Thank you! <3 Comment from : @BroZGaminG-tk8bc

Sorry it might be a stupid question But how did you figure out the initial 59935 monthly payment? What's the math for that? Comment from : @sadmanjaoad6994

But say the interest rate is 13 per year Do I divide that by 12 to get what's charged each month? I was assuming multiply the loan by the percentage and that's the interest rate per year Also, Im surprised you're able to write backwards lol Comment from : @edgarc3433

I never understood how loans worked until this video, and now I'm furious It's horrendous how for half of the period of your loan, you're paying mostly interest, and not the principal! I feel like 6 interest on $100,000 should just be $6,000 brI'm curious, if the minimum payment per month was $59955 and I decided to pay more per month, would that extra payment apply 100 toward the principal? Comment from : @FrankNamoKang

So just to be clear you are going to have to pay 215,614 dollars by the end of 30 years at 6 percent interest, absolutely mind blowing 🤯 Comment from : @griffmac9350

So your basically paying the bank first Comment from : @blackspiderman1887

I just bought a truck I've made 4 on time payments and i checked my balance It's the same as when i started! My payments have been going to the interest only!? Comment from : @rurukaba

What a precise explanation! Much appreciated!1 Comment from : @MohammedAfzal-d2b

Thank you for making such a complicated process be so easily understandable! Comment from : @loulalucille8946

Best explanation on youtube Comment from : @RTX-mz3rg

My name is Jonas, and I want to share with you on how I got my instant loan from supreme finance with in 24hours, so if you are here looking for an online loan, reach out to them now and you will have your loan and thank me later,br Best regards Comment from : @jonasjurgen8253

So to simplify on a 30 year loan with 6 percent fixed interest rate you are 6 percent in interest of your remaining balance yearly The monthly principal drops monthly very slowly in beginning and quicker at end of term brbrThats why they say you pay a lot of interest early in loans They want to get more early with this conplex formula Seems a bit scammy but all loans seem to work this way Best thing you can do is get lowest interest rate to start and if you can manage it pay extra each month to shorten the term and save on interest Comment from : @sikoticjaux

I hate how my accounting & Finance classes couldn’t explain this concept this easy Comment from : @gravitycore1

How to right at the mirror that way? Comment from : @junpauljumalon9843

How did you determine 6 interest I half a percent? What would be a fair interest/principle ratio for $370K mortgage at 7375? Comment from : @Ezekiel336

Well I guess if I pay off principal only that should reduce the amount of interest significantly Comment from : @VisionofTomo

Hey there, why can’t be the principal be 100,000 devided by 360 (months)? Why does the principal have to change every month? Comment from : @berrryred

This finally clarifies for me why more of the payment goes to interest at the beginning For some reason that didn't make sense to me before Comment from : @erutuon

How did he get the $59955???? How did he calculate this amount??? Comment from : @Aikynbreusov

nice Comment from : @jadesmitzy

Thanks for being very clear Comment from : @Moztreet

this is so fucked Comment from : @wayermane5069

How does it seem like he’s writing backwards? Comment from : @mattfischer1

6 of 100k is only $6k However , $59955 a Month for 30 years equates to $215,838 Which means it’s literally like 115 interest If it was 6 interest you would only pay $106k total Is anyone ever told , “ hey just so you know this is actually a 115 loan and we are telling you it a 6 loan “ I don’t understand the interest rate thing at all … 6 of 100 is 6 Not 215 You end up paying $215,838 on a $100k house while being told it’s only 6 I don’t understand how this is fair or how this works Comment from : @bobbyhill7312

Thank you! I couldn’t figure this out…your explanation was so easy to follow ❤ Comment from : @nicolerobinson3258

6 percent of 100,000 is 6,000 So why would paying 600 a month for 12 months times 30 years cost 215,000? Comment from : @munchingmakenna5776

i decided not to think about this, it's so sad i'll just think about it's a future investment and that's how bank make money Comment from : @luisitox808

So, out of this $100k loan, how much interest would the person have paid in the 360 months? Comment from : @SUPER_JAVI

I see Comment from : @soniaedwards9216

You're so good Your video is the only one that gives me so much clarity Thank you so much Comment from : @SunShine_sublime

Awesomeness Comment from : @fabianozennmusic

Is this included with Tax? Do you have to pay a tax along with it Comment from : @masonmartin6982

Related How Principal u0026 Interest Are Applied In Loan Payments | Explained With Example videos

Bank of Baroda Gold Loan | BOB Gold Loan Interest Rate | Gold Loan Interest Calculation Formula | РѕС‚ : Desi Loan Talk Download Full Episodes | The Most Watched videos of all time

Mastering Car Loan Math: Calculating Interest and Principal Like a Pro! РѕС‚ : Travis Sickle Download Full Episodes | The Most Watched videos of all time

Payments Unpacked: Future Payments Trends l Integrated Payments u0026 Embedded Banking РѕС‚ : MoneyNext Download Full Episodes | The Most Watched videos of all time

indian bank gold loan 2024 / indian bank gold loan interest rate 2024 tamil /indian bank jewel loan РѕС‚ : My Life My Savings Download Full Episodes | The Most Watched videos of all time

meezan bank loan 2025 - meezan loan 2025 - meezan bank personal loan 2025 -meezan bank business loan РѕС‚ : Loans And Banking Point Download Full Episodes | The Most Watched videos of all time

100% loan approval/ No cibil score loan/best loan app 2025 Tamil / loan app Tamil #loanapptamil РѕС‚ : RKS EARN MONEY Download Full Episodes | The Most Watched videos of all time

Behavior Analysis and Learning - Applied Behavior Analysis Pt1 - Applied Behavior Analysis РѕС‚ : The Cognitive Psychologist Download Full Episodes | The Most Watched videos of all time

Explained: Payday Loan vs. Short Term Loan vs. Instalment Loan РѕС‚ : Loanline UK Download Full Episodes | The Most Watched videos of all time

BOB Gold Loan Interest Rate | Bank of Baroda Gold Loan | Fees, Features, Benefits u0026 Eligibility | РѕС‚ : Desi Loan Talk Download Full Episodes | The Most Watched videos of all time

How To Calculate Loan Payments with BAII Plus Calculator by Texas Instruments, Mortgage, Auto Loan РѕС‚ : Ryan Brown Download Full Episodes | The Most Watched videos of all time