When a borrower takes out a mortgage, car loan, or personal loan, they usually make monthly payments to the lender; these are some of the most common uses of amortization. A part of the payment covers the interest due on the loan, and the remainder of the payment goes toward reducing the principal amount owed.

The meaning of AMORTIZE is to pay off (an obligation, such as a mortgage) gradually usually by periodic payments of principal and interest or by payments to a sinking fund. How to use amortize in a sentence.

Aug 31, 2024 · Amortize means to gradually write off a cost over a period. Depreciation is recorded to reflect that an asset is no longer worth the previous carrying cost reflected on the...

Mar 6, 2025 · An amortization schedule is a chart that tracks the falling book value of a loan or an intangible asset over time. For loans, it details each payment’s breakdown between principal and...

AMORTIZE definition: 1. to reduce a debt or cost by paying small regular amounts: 2. to take a cost, for example the…. Learn more.

In accounting, amortization is a method of obtaining the expenses incurred by an intangible asset arising from a decline in value as a result of use or the passage of time. Amortization is the acquisition cost minus the residual value of an asset, calculated in a systematic manner over an asset's useful economic life.

Jul 18, 2024 · What Is an Amortized Loan? An amortized loan is a type of loan with scheduled, periodic payments that are applied to both the loan's principal amount and the interest accrued. An...

In accounting, amortization refers to the process of expensing an intangible asset's value over its useful life. It is comparable to the depreciation of tangible assets.

May 10, 2022 · Amortization is the process of spreading out a loan into a series of fixed payments. The loan is paid off at the end of the payment schedule. Amortization is the way loan payments are applied to certain types of loans.

In general, the word amortization means to systematically reduce a balance over time. In accounting, amortization is conceptually similar to the depreciation of a plant asset or the depletion of a natural resource. Perhaps the most common example of the term amortization is the amortization schedule associated with a mortgage loan.