Glossary › Amortization
What is Amortization?
The process of paying off a loan through scheduled payments split between interest and principal.
An amortization schedule shows, for each payment, how much goes to interest versus principal and the remaining balance. Early payments are interest-heavy; the principal portion grows over time.
Example
On a 20-year loan, after 10 years you've often repaid less than 40% of the principal.