What affects loan repayments?
A loan repayment is affected by the amount borrowed, interest rate, number of payments and any fees included in the agreement.
Loan amount
Borrowing more increases the principal that must be repaid. With the same rate and term, a larger principal generally produces a larger scheduled payment.
Interest rate
A higher rate increases the interest charged on an outstanding balance in a standard amortising model.
Loan term
A longer term spreads repayment over more periods. That can lower the scheduled payment while increasing total interest in a simple fixed-rate model.
Fees
Monthly or once-off fees can increase the total amount paid even when the principal, rate and term stay the same.
Time-sensitive rules should be checked against the current official source and the applicable date. This page is intended as general educational information.