Although you make regular payments on your mortgage, home equity, student loan, personal loan, and/or car loans, it may be difficult to track your progress on paying down this debt, especially if you’re juggling multiple loans at one time. Luckily, there are simple ways to determine how large of a dent you’ve made – and how you can make it even bigger. 

Understand your statement

Whether you receive paper or online statements, most loan providers will give you these specific pieces of information on each statement:

  • Original principal amount: How much you originally borrowed from your lender
  • Current interest rate: The rate that is paid by you, to the lender, to borrow the money
  • Current balance: The amount you currently owe
  • Fees assessed: Fees you have been charged for late or insufficient payments, collections or additional services
  • Annual percentage rate (APR): The yearly percentage rate expressing the total finance charge on a loan over its entire term. The APR includes the interest rate, fees, and other financing costs, and is therefore a more complete measure of a loan's cost than the interest rate alone.
  • Total paid: How much of the principal and how much interest you have paid over a period of time, typically year-to-date
  • Total of payments: How much it would cost to pay off your loan by the end of loan term. This assumes that you make each monthly payment as agreed – no more and no less until the end of the loan.

Pay extra principal when possible to pay down your debt faster

By comparing the amount you currently owe to the amount you originally borrowed, you can get a good idea of how much progress you’ve made on your loan. Your statement also shows how much in principal you’re paying from period to period. If you can add a little more to your monthly payment to go towards principal, you will decrease the total cost of your loan and pay it off faster.

  Tip  

Even if you’ve paid a little extra in the past, make sure to pay your bills on time.

Knowing where you stand with all of your loans will help you formulate a repayment plan that will get you the most from your money. To find ways to pay your debts faster, look for ways to track your spending and pay down debt.

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