Whenever you borrow money, whether it’s for buying a home, purchasing a car, paying for college, or even starting a microbrewery you’ve always dreamed of, it’s important to understand the terms of your loan.

Here are the key details you need to know:

1. Loan Amount: This is the total amount you need to borrow or the maximum amount you’re allowed to borrow.

2. Loan Term: This is the length of time you’ll have to repay the loan.

3. Payment Frequency and Interest: This refers to how often you’ll make payments and how often interest will be applied to your balance. Typically, both the payment frequency and the way interest is calculated (monthly, annually, etc.) will be the same.

Once you have these details, you can easily calculate your monthly payments.

For example, let’s say you’re buying a car for $30,000. You have $2,000 for a down payment, and the dealer is offering you $3,000 for your trade-in. This means you would need to borrow $25,000. If the finance department offers you a five-year loan with monthly payments at a 4.99% interest rate, you can use a loan calculator to find that your monthly payment would be $471.67.