If a loan is paid off earlier, is the interest recalculated for the time of the loan life?
Wednesday, July 15th, 2009
sinchec_blue asked:
During the first years of the loan, the biggest part of monthly paiments go toward the interest which is calculated for the full live (30 years) of the loan. If the loan is paid off (refinanced) after 3 years, is the interest recalculated for the 3 years only and the over paid money go toward the principal or the money paid for the interest are “lost” for the borrower?
Tiffany
During the first years of the loan, the biggest part of monthly paiments go toward the interest which is calculated for the full live (30 years) of the loan. If the loan is paid off (refinanced) after 3 years, is the interest recalculated for the 3 years only and the over paid money go toward the principal or the money paid for the interest are “lost” for the borrower?
Tiffany