When repaying a loan, the borrower returns:
- initial loan amount;
- percent for the use of funds;
- other expenses.
Interest rates on loans are calculated according to general principles - as a share (in%) of the principal amount, calculated for a certain period, usually a year. The loan term can be significantly more or less than a calendar year, but this does not change the essence of the accrual, the interest rate is recalculated based on the period.
Other loan costs may include, for example, bank commission, appraisal, insurance and collateral, as well as penalties for late repayment of monthly payments, etc.