The True Cost of Borrowing: How to Spot and Limit Overpayment
How to Calculate the Overpayment on a Loan
When you take out a loan, you know you’re not just repaying the amount you borrowed. You’re also covering interest — the cost of borrowing — and sometimes fees. But how much extra are you really paying? That total difference between the amount you received and the amount you’ll repay over time is called overpayment. And if you don’t look closely, it can quietly eat into your budget. The number might surprise you. In this guide, we’ll walk through how to calculate overpayment on a loan, what affects it, and how to avoid paying more than you need to.
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Michael Turner is a finance expert passionate about simplifying credit, loans, and debt management. He helps readers make smart, confident financial decisions every day.