Most personal loans and car finance use a fixed monthly repayment calculated from the loan amount, annual interest rate (APR), and term. Each monthly payment covers the interest accrued that month plus a slice of the principal. In the early months, more of each payment goes to interest; as the balance falls, more goes to principal. This is why making overpayments early in a loan saves disproportionately more interest than overpaying later.
The APR (Annual Percentage Rate) is the figure lenders are required to advertise and is the right number to use here. It includes the interest rate and any mandatory fees rolled into the cost of borrowing. If a lender quotes a monthly rate rather than an annual one, multiply by 12 to get the approximate APR — though the compounded annual equivalent will be slightly higher. Always confirm the exact APR in your loan agreement before signing.