Loans and retail installment contracts through Upstart use simple interest to calculate payments. This means that a fixed interest rate is applied to the unpaid principal balance through the life of the loan. Interest is not charged on any unpaid interest or late/ACH fees.
Payments are owed in equal monthly installments, with a larger portion of your early payments going toward interest because most of the principal balance has not been repaid yet. As you pay down the principal, a smaller amount of interest will accrue each month because the principal balance will be less. This will allow a larger share of the monthly payment to repay principal over time.
Since interest accrues daily, the amount of interest you owe for each payment may vary depending on how many days have passed since your last payment. If you make your payment a few days early, you will owe less interest because fewer days will have accumulated. This means more of your payment will go towards reducing the amount of principal you owe.