Which of the following statements is TRUE if you increase your monthly payment above the required loan payment?
A)The extra portion of the payment does not go to the principal.
B)You can significantly increase the number of payments needed to pay off the loan.
C)The extra portion of the payment increases the principal.
D)You can significantly reduce the number of payments needed to pay off the loan.

Question

Quizplus · Accepted Answer

By increasing your monthly payment above the required loan payment, you can reduce the amount of time it takes to pay off the loan and reduce the total amount of interest paid. The extra portion of the payment goes towards the principal, which reduces the balance owed on the loan faster. Therefore, the number of payments needed to pay off the loan can be significantly reduced.

Which of the Following Statements Is TRUE If You Increase