This is a procedure called "amortization." To determine your month-to-month mortgage payment over the life of your loan, be sure to take a look at our home mortgage calculator. On the other hand, installment loans-- like a vehicle loan-- can either be: "Easy interest add-on" or "Basic interest amortizing" These are actually written as a single loan; all of the interest that will be due is determined in advance, contributed to the total of the loan as a finance charge, then that sum is divided over the variety of months in the term to arrive at your regular monthly payment.These work like a home loan, with a declining loan balance and decreasing term producing a continuous month-to-month payment with altering structures of principal and interest. Prepaying these can conserve you some money. There can also still be loans based upon a thing called the "Rule of 78." These are simple interest add-on loans with a twist; they are structured to have you pay the interest due on the loan initially, then once that's done, your payments will cover the principal.If you must hold the loan to term, there is no distinction in overall expense when compared to a basic basic interest add-on loan, however if you need to require to pay the loan off early, you'll find that you'll still owe most-- if not all-- of the original loan you took regardless of having made payments for some time period.