€26 a month sounds cheaper than €93.
It is not.
The same €1,000 at 20% a year:
Paid back in 1 year: about €1,110.
Paid back in 5 years: about €1,590.
A longer loan makes each payment smaller and the whole bill bigger.
When you borrow, do you look at the monthly payment or the total?
Education, not investment advice.
Read the sheet as text
Smaller Payments, Bigger Bill.
The same €1,000 at 20% a year. Only the time to pay it back changes.
Total paid back, for example:
1 year: €93 a month, about €1,110 in all.
2 years: €51 a month, about €1,220 in all.
5 years: €26 a month, about €1,590 in all.
The catch: €26 a month means about €590 extra. The smallest monthly payment costs the most in the end.
Example rate, paid back monthly. Compare the total you pay, not only the monthly payment.
