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Making extra principal payments reduces your outstanding balance faster, which means less interest accrues each month. Even small additional payments each month can save hundreds or thousands in interest and shorten your loan term significantly. Always specify that extra payments go toward principal, not future payments.

An amortization schedule is a table showing each payment's breakdown between principal and interest, along with the remaining balance after each payment. Early in the loan, most of each payment goes toward interest. By the end, most goes to principal. You can request your amortization schedule from your lender.

Shorter terms have higher monthly payments but significantly less total interest paid. Longer terms have lower monthly payments but cost more overall. If you can afford the higher payment, shorter terms save more money. If cash flow is tight, a longer term provides flexibility — just avoid prepayment penalties so you can pay extra when able.