: The cost of borrowing, which is the profit for the lender.

: Combining multiple high-interest loans into a single personal loan can simplify tracking and often results in a lower overall monthly payment.

: The original amount borrowed that goes toward paying down the debt.

: Adding even small amounts to your monthly principal can significantly reduce total interest costs and shorten the loan's duration.

: Establishing a strict budget to track "must-haves" versus "nice-to-haves" can free up cash for faster repayment. Additionally, refinancing may allow you to take advantage of lower interest rates. Key Terms to Know

Standard loan payments are generally made monthly and consist of several components: