Budget Line: Loan Interest

![](docs/images/lineofcredit.png)

The amount that you have to pay the bank every year to service your loan.

![](Chart::StatLoanInterestStat)

There are three factors to your Loan Interest:
* [[budget/budgetbalance|Budget Balance]]
> Loan Interest is Budget Balance times Interest Rate.
> ![](Chart::StatCityBondRate)

* Loan Term
> If you take out a longer-term loan, there is more time to earn money to pay it off, so you can take a larger loan. However, you will be charged a higher interest rate.

* National Economy
> The liquidity of the nation's financial system can play a role in your interest rate.
> ![](Chart::StatNationalInterestRate:National)

Since you are already in debt, all of your expenses come from your [[budget/budgetlineofcredit|Line of Credit]]. Therefore, instead of "paying" your loan interest, it actually just gets tacked back on to the loan. That way you can keep spending!

See also [[budget/budgetcashtospend|Cash to Spend]] and [[budget/budgetbalance|Budget Balance]].