Most borrowers assume the key to saving money is chasing the lowest APR. It seems obvious: lower rate, lower cost. But the data tells a different story—loan structure matters more than rate alone.

Why APR isn’t the full story

Let’s compare two scenarios for a $30,000 debt consolidation:

• 7% APR over 10 years = $348/month, $11,800 total interest.
• 9% APR over 5 years = $622/month, $7,300 total interest.

Even with the higher rate, the shorter loan saves $4,500 in lifetime interest.

This isn’t hypothetical. According to Federal Reserve data, households that consolidate into shorter terms consistently save more and pay off debt faster—even if their APR is slightly higher.

The compounding effect of time

Interest compounds over time. The longer your term, the longer interest has to “snowball.” Borrowers are often lured by the comfort of smaller monthly payments, but that comfort can cost thousands in the long run.

Why lenders rarely explain this

Most lenders market based on monthly payment affordability. It’s an easy sell: “Save $200 a month!” But affordability doesn’t equal optimization. Without showing you the total cost of the loan, the picture is incomplete.

The Got Lending approach

We encourage borrowers to compare:

• Amortization schedules (principal vs. interest each month)
• Cumulative costs (total dollars paid over the loan)
• Time-to-zero (months until debt-free)

By viewing these three lenses, you see the full financial picture—not just the headline.

Practical steps for borrowers

1. Don’t chase the lowest APR blindly.
2. Ask for the total cost over the life of the loan.
3. Compare different terms side by side.
4. If possible, choose the shortest term you can afford without overextending.

Final thought

Debt consolidation isn’t about finding the “cheapest-looking loan.” It’s about building a payoff plan that balances affordability and speed. The counterintuitive truth is that a slightly higher rate on a shorter term may save you thousands more than a “low-rate, long-term” loan.

Your future self will thank you for looking beyond the APR headline.