The process of reducing debt through regular installment payments of principal and interest that will result in the payoff of a loan at its maturity.
Amortization is the gradual repayment of a debt over a period of time, such as monthly payments on a mortgage loan or credit card balance.
To amortize a loan, your payments must be large enough to pay not only the interest that has accrued but also to reduce the principal you owe. The word amortize itself tells the story, since it means "to bring to death."
- Browse Related Terms: amortization, Asset-backed bond, Credit card account agreement, Date of maturity, Debt-to-income ratio (DTI), Deferred payment, Delinquency, Honorarium, Late Charge, Maturity Date, Payment Due Date, Prepayment, Self-amortizing loan
the process of paying off a debt by making regular installment payments over a set period of time, at the end of which the loan balance is zero.
The process of fully paying off indebtedness by installments of principal and earned interest over a specific amount of time.
- Browse Related Terms: Adjustable-Rate Mortgage (ARM), amortization, balloon mortgage, Convertible ARM, Debarment, Fixed-Rate Mortgage (FRM), Interest-only mortgage, Lock-In, Lock-in agreement, Mortgage life insurance, Negative amortization, Payment Cap, Right of rescission, Self-Amortizing Loans, Swap, term, Weighted Average Life (WAL)
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