There’s a lot more to a loan than just the interest rate. Especially if you think you’ll pay it back early (which is usually a good idea).

Aside from the rate and term, one of the things that you’ll run into is the Amortization Schedule (or sometimes called Amortization Table). And that’s a schedule of not only when your payments are due, but how the lender is going to apply your payment to the interest and the principal (spoiler alert: it’s not how you’d expect).

The lender is typically going to take their cut first (interest). And will send what’s leftover to paying down your balance (principal). Next time you’re looking to finance something, be sure to look at how your payments are going to be applied.