In some areas, I'm very smart. But in others, that area of my brain is dark and quiet.
We've needed to use our Home Equity loan for various important things lately. I want to pay it off ASAP, but money is sort of tight and unpredictable.
I know that we have to pay interest every month on the monthly due payment. After that is paid monthly, then I can pay towards "only principal". I'm thinking doing that is a good thing, since there's no interest taken out, right?
Isn't the interest only taken out of the monthly "due" payment? Is my thinking wrong, that it's best to pay just towards principal as often as I can? Does the bank somehow screw me over for doing that, so that it really doesn't matter in the end?
We're allowed to pay off this type of loan as soon as we can.
Is my thinking correct that when paying towards "principal" often, it reduces the total amount that interest is charged on and that's why it's good to do?
Sorry I'm slow. My brain is a curious thing. And DH gives me info that isn't always correct, and I can't always understand bank people when I call them.
Thanks!