Facebook Twitter Instagram
    LocalLoans
    • Finance
    • Personal loans
    • Home loans
    • FNB Calculator
    • Debt
    • Financial tips
    • About
    • Contact
    Facebook Twitter Instagram
    LocalLoans
    Home»Personal loans»All you need to know about Loan Amortization
    Personal loans

    All you need to know about Loan Amortization

    adminBy adminJuly 18, 2016Updated:July 18, 2016No Comments2 Mins Read
    Facebook Twitter Pinterest LinkedIn Tumblr Email
    Share
    Facebook Twitter LinkedIn Pinterest Email

    Loan Amortization is a loan with scheduled periodic payments of both principal and interest. The principal portion of the loan is the actual loan amount itself, while the interest portion of the loan is the amount the debtor is charged by the creditor.

    With an amortized loan, the principal of the debt is paid down over the life of the loan, typically through equal payments. Monthly payments for the loan are first applied toward reducing the interest balance and any remaining sum towards the principal balance. So, as the loan is paid off, more money goes towards paying off the principal amount.

    An example of loan amortization:

    When you buy a car or get a mortgage, the loan can either be fully or partially amortized.

    Car loan – If you are approved for a car loan, you are given the option of a balloon payment. With balloon payments, you are able to delay some of the payment of the principal debt. The shorter the remaining term, the larger the increase required in the periodic payments to amortize the loan over the remaining term. So as you get closer to paying off your loan, you may have a balloon payment to settle in a very short space of time.

    An amortization schedule is used to show exactly how the payment structure of a loan is, if payments are made on time and in proper amounts. This schedule will illustrate how the debt is eliminated (amortized) over a period of time and how the interest and principal portions are reduced.

    Share this:

    • Facebook
    • Email
    • LinkedIn
    • Twitter
    • Print
    finance-solutions-loan-amortization fully-or-partly-amortized loan-amortization
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    admin

    Related Posts

    Absa Personal Loans

    March 27, 2019

    Understanding Personal Loans

    February 20, 2019

    A Comprehensive Analysis Of Instalment Loans

    February 20, 2019

    Leave A Reply Cancel Reply

    ten − 3 =

    Recent Posts
    • 5 Roles Of A Credit Analyst
    • Benefits Of Corporate Social Investment
    • How To Qualify For A Wonga Loan
    • 5 Facts About The 2019 Elections
    • Quick Ways To Check Your Credit Score
    Recent Posts
    • 5 Roles Of A Credit Analyst
    • Benefits Of Corporate Social Investment
    • How To Qualify For A Wonga Loan
    • 5 Facts About The 2019 Elections
    • Quick Ways To Check Your Credit Score
    In the News
    • Capfin Loan Calculations
    • Loans Without Affordability Checks
    • Woolworths Sms Account Application
    • Apply for a Capitec Loan Online
    Recent Posts
    • 5 Roles Of A Credit Analyst
    • Benefits Of Corporate Social Investment
    • How To Qualify For A Wonga Loan
    • 5 Facts About The 2019 Elections
    • Quick Ways To Check Your Credit Score
    Recent Posts
    • 5 Roles Of A Credit Analyst
    • Benefits Of Corporate Social Investment
    • How To Qualify For A Wonga Loan
    • 5 Facts About The 2019 Elections
    • Quick Ways To Check Your Credit Score
    Facebook Twitter Instagram Pinterest
    © 2023 ThemeSphere. Designed by ThemeSphere.

    Type above and press Enter to search. Press Esc to cancel.