Your simple interest loan explained

A simple interest loan is just that: simple. Interest is the cost of borrowing money to finance your loan. Interest accrues daily on the unpaid balance of your contract. Generally, with each payment, interest is paid down first, and the remaining amount of your payment is applied to the principal and any fees on your account. The more days between payments, the more interest you will pay. The less days between payments, the less interest you will pay. Missed payments and other factors such as due date changes and payment extensions can lead to more interest as interest accrues daily between payments. Making payments early and for more than the minimum amount due can lead to less interest and an early payoff.