How Much Interest Do You Pay Monthly?

//How Much Interest Do You Pay Monthly?

How Much Interest Do You Pay Monthly?

I can’t believe it has been 19 months since I last determined how much interest I pay to financing companies!  I remember how I felt when I wrote that post, while I understood how amortization loans worked and that financing costs were inevitable it wasn’t until I did the actual calculations that I found how much was going to interest. In November of 2009 I was paying approximately $1,498 in interest per month and that was out of a little over $1,900 in monthly debt servicing payments.

So when I came across it in my archives I knew I should at the very least attempt to recreate that experience to determine if the amount being paid towards interest was lower.

How Much of My Monthly Payments are Going to Interest?

I don’t keep a balance on my credit cards which is why none are present.

DebtMonthly PaymentPrincipal PortionInterest PortionDifference From 19 Months Ago
Mortgage Payment$1,259 (without Taxes)$183$1076$44 More towards Principal
Student Loan #1$252$82$170$82 More Towards Principal
Student Loan #2$106$80$26$5 More Towards Principal
Auto Loan*$221$198$22$92 Will be paid off by the End of the Month
Total$1838$543$1,294$204 Less Interest Per Month

I would assume I am like most people in that home lending costs is my biggest debt and I doubt that is going anywhere any time soon, however, I am pretty happy with the strides I have made in the other debts.

I refinanced the auto loan since that original November 2009 post and have paid it down with intentional aggressiveness. Year to date the auto loan balance is down about $8,000 and should be paid off in the next 10 days. I will then focus on building my assets more than paying off debt, whereas, now it has been a shared primary goal. 

Has my Attitude Towards Debt Changed?

I don’t think my general attitude towards debt has changed all that much, but rather my priorities have.  My first priority was to get rid of that ridiculous auto loan, and then, for the rest of the year, I will balance (in this order):

  • My need/desire for liquidity
  • My need/desire to pay down School Loan #2
  • My need/desire to build up investable assets

Have you ever done a similar exercise? How did it turn out?

photo credit: Arrrgghhh

By | 2014-02-26T15:02:03+00:00 June 23rd, 2011|Debt|36 Comments

About the Author:

Evan is the owner of My Journey to Millions which was started to track his journey from a broke debt ridden law school graduate to building a positive balance. Need more Evan? Follow him on Twitter, Contact him or get new posts directly to your email


  1. The Borrower June 23, 2011 at 6:25 am - Reply

    AT $43.13 of interest a day, I think you’re doing relatively well. We pay more than double that daily.

    • Evan June 23, 2011 at 11:34 am - Reply

      Imagine having all that money back in your account?! Oh man I can only dream of that day eventually lol

      Or at least all ~$300 I pay monthly in other non-mortgage debt

  2. NDMBA June 23, 2011 at 8:31 am - Reply

    I currently have none of my money going towards interest since I have no debt. Fascinating breakdown though. It’s a great way to look at the cost of debt.

    • Evan June 23, 2011 at 11:36 am - Reply

      Wow so you have ZERO debt? Absolutely None?!

  3. Sass June 23, 2011 at 8:57 am - Reply

    My current interest payments aren’t ridiculously bad — only about $90 per month, however, that is also ONLY credit card debt (cars are paid for and I rent my home), so none of it is “good” debt. I’m working hard to get all of that off my plate. It may only be 3.7% of my take home pay, but its 3.7% too much for places I’ve already been to, meals I’ve already eaten, and clothes that have already been donated to goodwill!

    • Evan June 23, 2011 at 11:42 am - Reply

      You have a CC with 3.7% APR? That’s a Fantastic rate…still sucks to pay it but at least it is at a lower rate

      • Sass June 24, 2011 at 6:53 am - Reply

        No, the credit card rate isn’t 3.7% — that’s how much of my take home pay per month is going just to interest! (If I did the math right, that is!)

  4. Sunil June 23, 2011 at 8:58 am - Reply

    those numbers look pretty good to me. personally i don’t believe in carrying debt unless the obvious exists, which is better use for my money. i don’t pay any interest on debt tied to personal consumption / use. i do pay interest on several mortgages, personal notes and LOCs because those funds are tied up in assets that are generating higher returns + tax benefits.

    • Evan June 24, 2011 at 8:15 am - Reply

      Several mortgages? So you do believe in debt when you are leveraging for greater returns.

      It is ok to admit that!

      • Sunil June 24, 2011 at 8:21 am - Reply

        totally man – can’t get enough in fact!

  5. krantcents June 23, 2011 at 12:03 pm - Reply

    Although I do not think about interest paid too often because I only have a small mortgage at 5%. I do not want to have any more payments even at zero interest. Maybe it is because I am old(er) and thinking about retirement.

    • Evan June 24, 2011 at 8:17 am - Reply

      Probably is the reason…Keeping expenses low in retirement (well life) will make it easier to live on your nest egg

  6. DM June 23, 2011 at 5:43 pm - Reply

    I did do a similar exercise recently, where I looked at interest payments. The first one that I decided to reduce/eliminate was the auto loan. I sold the car and now bus/bike to work and elsewhere. So that interest payment went to $0, along with gas and insurance (which are like debt, really).

    The only debt I have now is student loans. The monthly interest payment is right about $65.00.

    • Evan June 28, 2011 at 5:06 pm - Reply

      Not too bad….I just literally paid off my car yesterday I’ll be putting together a post about it

  7. Andy Hough June 23, 2011 at 5:33 pm - Reply

    I currently pay $0 in interest and I like it that way. My student loans are on income based repayment though so I will eventually have to pay some interest on those assuming my income doesn’t always stay this low.

    • Evan June 24, 2011 at 8:19 am - Reply

      Then let me say I hope you pay interest! Lets get that income up

  8. 101 Centavos June 23, 2011 at 10:01 pm - Reply

    We have no debt except for the mortgage, and that one I don’t want to look at too often, or my blood pressure suffers.
    Here’s a best wish to killing those student loans quick, and with extreme prejudice.

    • Evan June 28, 2011 at 5:06 pm - Reply

      hahahahahah I get so angry when I look at the Mortgage statement

  9. retirebyforty June 23, 2011 at 11:36 pm - Reply

    That’s a good exercise. Everyone should do that and see how much interest they are paying. Like 101 centavos, we only have mortgages and it’ll take a while to get paid off.

    • Evan June 28, 2011 at 5:07 pm - Reply

      That’s fantastic! I thought I remember reading on your site about student loans

  10. LifeAndMyFinances June 24, 2011 at 6:07 am - Reply

    I don’t pay any interest whatsoever. I think debt is for the poor, and cash is for the rich. I’ll use cash as often as I possibly can and avoid paying others to borrow their money.

    • Evan June 28, 2011 at 5:08 pm - Reply

      “I think debt is for the poor, and cash is for the rich. I’ll use cash as often as I possibly can and avoid paying others to borrow their money.”

      That’s bullshit…I couldn’t disagree with you more. Read any book by anyone who has made legitimate money, it is about leveraging. Doesn’t that mean you should leverage for an iPad? No but should you leverage for a rental property…maybe

      • LifeAndMyFinances June 28, 2011 at 8:38 pm - Reply

        If you’re talking about billionaires, then yeah, you’re right. But I don’t need billions, I just need a few million. That can be done (and be done safely) without debt of any kind. Give me 10 years and I’ll prove it to you. 😉

        • Evan June 29, 2011 at 8:05 am - Reply

          If it makes you feel better I am 100% pulling for you! Not much faith with ZERO debt but still pulling for the big guy

  11. SomeFinanceForThought June 24, 2011 at 1:09 pm - Reply

    I’m amazed by the commenters who do not have any debt. No debt at all? That’s amazing. I think breaking down how much of my money goes to paying interest, especially breaking it down to a daily figure, would really inspire me to get rid of some of these payments. If all of the money I spend on interest was sitting around in an account growing its own interest, I’d be rich. Thanks for the inspiring read!

    • Evan June 28, 2011 at 5:09 pm - Reply

      Right?! I am shocked with the comments really cool stuff

  12. cashflowmantra June 25, 2011 at 12:14 pm - Reply

    Not sure how I missed this the other day. I will have to make sure that my subscription is working. This is a great exercise and one that I should do. In fact, I will be doing this when I get a chance to sit down and work in the office tomorrow. Right now, I am taking a quick break from cleaning up around the house and have to get back to work.

    • Evan June 28, 2011 at 5:10 pm - Reply

      Well I am waiting for your report?

  13. South County Girl June 25, 2011 at 6:47 pm - Reply

    We only have our mortgage which, last month had $153.19 in principle… and $497.45 of interest.

    $16.58 per day…

    • Evan June 28, 2011 at 5:11 pm - Reply

      Only have a mortgage? That is fantastic. No student loans? No car?

      • South County Girl June 29, 2011 at 9:27 am - Reply

        I bought my car a few years ago, financed it because I didn’t have the money saved up…but paid it off im 14 months (over 17k).

        I never took a dime out in student loans and got through a private college on scholarships, grants, and by working odd jobs.

        My fiance just has a small loan to his parents that will be paid off in full a few days before we get married next week… (We cash flowed our wedding)

        So all we have left is the mortage on a little one bedroom condo I bought a year and a half ago. Once we get our ef finished (sooo close) we’ll be stocking 15% away for retirement and then slowly beginning our journey to pay down the condo we we can get a house with a yard 🙂

  14. Kellen June 27, 2011 at 10:06 am - Reply

    I have my student loan set up to make the minimum payment automatically each month, and then I usually make an additional payment of about $500.

    Of the minimum payment in June, ($195), $141 went to principal and $54 went to interest.

    Other than the student loan, I don’t carry any credit card debt, so no other interest expense.

    • Evan June 28, 2011 at 5:12 pm - Reply

      No house yet?

      An extra payment of $500? Wow, that is amazing…ever play with the amortization table to see how you are raping that loan?

      • Kellen June 28, 2011 at 8:08 pm - Reply

        Whoops! What I meant to say is, I make an extra payment that brings the total payment up to $500. I was paying more than that, but I want to build my emergency fund first. Paying off more and more each month was getting kind of addictive, but I didn’t have anything left in my bank account!! It’s really nice to see the thousands digit tick down once every 2 months. (I’ve run amortization tables in the past to see how much my total interest will change if I pay $600 instead of $500, for example. Pretty cool.)

  15. slug March 27, 2012 at 12:54 pm - Reply

    Ha tweeting some old posts today? Do you also calculate the write-off amount of that interest due to itemizing your taxes? That might make it hurt a little less.

    • Evan March 27, 2012 at 11:11 pm - Reply

      Yup! I like to get posts I am happy with in front of new eyes/followers. I do not take into account any changes in my tax situation due to the debt.

      The only reason is that I find it less interesting and a ton can change before the end of each tax year so to know how much is being deducted (my bracket) would be impossible.

Leave A Comment