Divide your interest rate by the number of payments, you can pay in the year (interest rates are expressed annually). So, for example, if you’re making monthly payments, divide by 12. 2. Multiply it by the balance of your loan, which for the first payment, will be your whole principal amount.

While you can often use one loan to pay off another payment, be sure to read the fine print of your contract first and be wise about your spending habits. … For example, “a bank may require the money to be used to pay off existing debts, and even facilitate the payments to other lenders,”.