Knowing your loan's interest rate matters, as does learning how that rate is calculated. Interest is either simple or compound. Are Personal Loans a Good or Bad Idea? Taking out a personal loan can ...

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Doretha Clemons, Ph.D., MBA, PMP, has been a corporate IT executive and professor for 34 ...

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Michael Boyle is an experienced financial ...

A simple interest loan calculates the interest based only on the principal you owe. It stands in contrast to a compound interest loan, which calculates interest based on principal and any outstanding ...