The total amount of interest a consumer will pay over the loan term as a percentage of the loan amount is referred to as the?

The term that refers to the total amount of interest a consumer will pay over the loan term as a percentage of the loan amount is known as the "Total interest percentage." This metric helps borrowers understand the overall cost of the loan relative to the principal amount borrowed. It provides a clearer picture of the long-term financial obligations tied to the loan, beyond just the monthly payments.

This concept is particularly useful for consumers as it encapsulates the cumulative interest expense, allowing them to compare different loan options more effectively. By expressing the total interest as a percentage of the principal, borrowers can gauge the overall cost of borrowing in relation to the amount they are borrowing.

While other terms exist in the context of loans, such as the Annual Percentage Rate (APR) and Total Finance Charge, they do not specifically quantify the total interest over the loan's term in the same straightforward manner. The Annual Percentage Rate often includes additional costs associated with the loan (like fees), while the Total Finance Charge encompasses interest and other costs throughout the loan's life. "Total interest percentage" specifically isolates the interest component, making it a clearer measure for some borrowers.