![]() ![]() For example, for an auto loan, the finance department sets aside the monthly payments in a way that sends a certain portion of the payment toward the interest and the remainder toward decreasing the total loan principal, or balance. This type of amortization allows the borrower to pay down a larger portion of the principal with each payment. Here are two kinds of amortizations finance professionals use: Amortization of loan Loans that you can amortize include auto, home and personal loans. According to the amortization schedule, a greater percentage of loan payments cover interest in the beginning, but this proportion decreases over time until the company finishes the loan payment. ![]() Amortization refers to repaying debt in regular installments comprising interest and principal payments, so a company makes the full payment by the maturity date. View more jobs on Indeed What is amortization?Īmortization is a process of accounting in which the monetary value of a loan or value of intangible assets decreases over time. ![]()
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