amortized loan

Popular Terms
Installment loan in which the monthly payments are applied first toward reducing the interest balance, and any remaining sum towards the principal balance. As the loan is paid off, a progressively larger portion of the payments goes toward principal and a progressively smaller portion towards the interest. Also called amortizing loan.

Use 'amortized loan' in a Sentence

Many home loans are examples of amortized loans which consist of scheduled payments which can have terms anywhere from 15-30 years and it initially works by decreasing the interest and then later decreasing the principal or the original amount taken out to purchase the home.
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I needed to get an amortized loan, so I went to my friend, who worked at a bank, and asked him how it worked.
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You may want to take on an amortized loan if you really need some cash now and know you can pay it back.
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