I have read a lot of times people talking about paying loan principal vs paying loan interest.

It doesn’t matter which one you do. It’s all the same thing (amount owed).

Pretty much all loans have their interest calculated based on average daily balance.

If you pay the principal or the interest, it’s the same net effect.

If you have a loan of say $1000 and your monthly interest is $30 and you get to the end of the month and make a $30 payment on the loan, you are going to have $1000 worth of loan left over regardless if you specify you want your $30 to pay the principal or the interest.

It’s going to be (1000 – 30) + 30 or 1000 + (30 – 30), either way the net result is the same.

You might as well not bother specifying one way or another, just let the bank worry about it.

If you want to save on interest, the way you actually do it is just to pay your bill earlier.

If you owe 1000 and you are set to have interest of $30 per month, you might only owe like 29.50 worth of interest at the end of the month if you pay your $30 owed on the first day of the month. These aren’t real numbers, just for the sake of argument.

Every day at the end of the day the bank is going to charge you interest roughly equal to your interest rate divided by 365. If you pay sooner, your interest gets calculated based on a smaller amount at the end of every day.

Some loans have pre-payment penalties, which means you accrue fees for paying early. Most loans don’t have this and you should make sure loans you get don’t have this. Try not to get any loans that have pre-payment penalties. Usually, it’s not that hard to avoid getting loans of this type, they are pretty uncommon.

Assuming you don’t have a loan of that type, then there is no good reason not to pay as much as you can as early as you can if your goal is to pay off the loan most quickly. All it will do is reduce the overall amount of interest you end up paying in the long run.