Total Interest Expense refers to the total amount of interest a borrower accrues on their loan. In other words, it's the cost of borrowing funds.

For a fixed rate loan, total interest expense is set to a specific monetary amount (assuming the borrower makes minimum monthly payments on-time during their payback period). For a variable rate loan, total interest expense is an estimate. Because the interest rate of a variable rate loan either increases or decreases over time, it’s impossible to know exactly how much interest will accrue over a borrowing period.

If you need help with other loan jargon, check out our Glossary.