A friend of mine took a loan from LendingClub last year so as to pay off some credit cards and other debt and to have just a single payment to make each month.
Admittedly the interest rate offered by LendingClub was not particularly low: it's 21.18% (APR is 24.21%) on a 60-month loan.
Today he asked me if it was normal that the bulk of a payment towards the loan would go towards the interest. The payment history on his loan looks like as shown in below screen shot.
(He has made 8 payments so far; the first payment was the one made in May last year.)
So for example their latest payment was for $868.96 and out of this a whopping $525.17 was applied to the interest.
It looks crazy but I was not sure if there is some reason or situation in which this is somehow normal(?)
Shouldn't the amount that is applied toward the interest be considerably less than the amount applied toward the principal?
A difference with my friend's loan is that mine was a 36-month loan for a lower amount, with a slightly lower rate: 17.58% with an APR of 21.31%
Is it these differences in the total loan amount and payment terms that could have caused the differences in how much goes toward the interest?