How to Calculate Total Interest Paid on a Home Equity Line of Credit

It is important to stay on top of your home equity line of credit-how much you have paid and still have to pay. On of the ways to do this is to calculate the total interest you have paid on the home equity line of credit. This will help you see how your interest rate is effecting the life of the loan.

Instructions

Difficulty: Moderately Easy

1. Gather the information you have about your home equity line of credit. This should include your monthly payment, interest rate, total amount borrowed and the total amount you have paid thus far. You should also have the information about the type of home equity line of credit you have, so you know if your interest rate is fixed or not.
2. Understand the break down your monthly payment goes through. It is usually broken down according to your interest rate. If your interest rate is 10% and your monthly payment is $500, then you are paying $50 toward the interest and $450 toward the principal amount of the loan.
3. Calculate how much interest you will pay over the time of the loan. This is often an easy number to find in your loan agreement. If it is not, take the total amount borrowed times the interest. This will give you the interest you will pay over the life of the loan. You could then add it to the principal amount of the loan and get the total balance you will pay over the life of the loan.
4. Write down the number of payments you have made on the home equity line of credit. Using the formula in step two, calculate the amount of interest you have paid so far. You can compare this figure to the amount of interest you are to pay over the life of the loan to see how much progress you have made.