Total of Payments
Total of payments is the sum of every scheduled payment on a loan — the total dollar amount you'll pay over the full term if you make all payments on schedule. It equals the amount financed plus the finance charge. This is the most useful single number for comparing loans with different terms, because APR alone can mislead when terms differ.
Total of payments tells you the bottom-line cost of a loan. It’s not normalized to a year like APR, and it includes both the principal you have to return and the interest and fees you have to pay. Just the actual dollar amount that will leave your account over the loan’s term.
Why this is the comparison number to use
For loans with different term lengths, APR can give you a misleading picture. A $1,000 loan at 100% APR over 6 months has a lower total of payments than a $1,000 loan at 60% APR over 24 months. Lower APR, higher dollar cost.
For loans with the same term length, APR and total of payments will rank them the same way. For loans with different terms, total of payments is the more reliable comparison.
How to use it when shopping
Federal law requires all consumer loan disclosures to show total of payments alongside APR. When you have multiple offers in front of you, write down the total of payments for each: that’s the actual dollar comparison. The offer with the lowest total of payments at a monthly amount you can afford is almost always the best choice, regardless of which has the lowest headline APR.