What You’re Paying Back with a Loan

Taking out a loan for business or personal purposes can be a necessity for some but many people will hastily get a loan, not fully understanding the type of loan they’re dealing with, and think about how much they owe later, which is when debts can start to build up and cause problems if you don’t manage your outgoings correctly.  Firstly, you need to understand the type of loans that you take.  Here’s an example: If you are a car owner living in Texas and interested in taking a loan from a Texas Title Lender, you need to understand that you must allow the lender to place a lien on your vehicle.  The bottom line, you need to choose the type of loan that works the best for your situation.


Secondly, you need to know what should be paid, in addition to the principal amounts.  There are often a lot of numbers involved and it can be hard to work out the best one for your needs. Unfortunately paying back a loan isn’t always as simple as returning the amount borrowed with a little interest on top. Calculating what you or your business owe and how long it will take to pay back is incredibly important.

Taking loan for business


In the same way that interest is added to money you deposit into a bank account, as the bank ‘borrows’ your money, interest is paid by you the borrower, on money lent from a bank/other lender. This is often at a set rate which doesn’t change, making it fairly simple to work out what additional fee you’ll have to pay on top of the borrowed amount.

It gets more complicated with compound interest, which normally applies after a year or other agreed set of time. Compound interest is basically interest added to the original amount of interest you already pay. This can quickly increase your debts as the longer you borrow the more you’ll owe.


Most lenders include more than just interest fees with the loans they offer. APR stands for Annual Percentage Rate which includes the amount of interest and all other charges associated with the loan. For example, the interest level may only be 5% but with arrangement fees and other compulsory charges it could increase to 8 or 9%.

Use the Nemo loan calculator to work out how much you’d have to pay monthly on differing amounts borrowed over varying periods of time. The APR rate is usually variable but this shows the total amount payable, with lower rates for longer periods. A Nemo loan is secured against your home so you must make sure you can afford the repayments.

Other Costs

There is no tax involved when borrowing money, only when earning from savings. APR only includes compulsory fees, so there can still be extra charges added on top of your loan. These include things such as broker fees, transaction charges, settlement and closing costs. Before agreeing to any loan it is essential you are fully aware of, and able to pay, any extra charges.