amortization schedule definition
Loan Amortization Schedule. The schedule according to which one repays a loan. The loan amortization schedule shows the amount of each installment and how much principal and/or interest is repaid each month. See also: Amortization. A report that usually shows the principal and interest allocation of each monthly payment during the first year,the total principal and interest paid in each subsequent year, and the total interest that will be paid over the life of a loan. YES NO 3 people found this helpful. “ When we were ready to purchase our first home the amortization schedule shocked us because the amount we would pay for the house over the length of the loan was more than double the purchase price. ”. Definition. A schedule for amortization, or the repayment of a large loan over a fixed period of time in fixed installments. Each paid installment counts toward the principal balance and interest of the loan. The amortization table will report interest-paid-to-date and principal-paid-to-date. Definition. The schedule of payments for paying off a loan. An amortization schedule breaks down the payments into interest and principal, which is helpful because with an amortized loan these the amounts vary with each payment. 2. The spreading out of capital expenses for intangible assets over a specific period of time (usually over the asset's useful life) for accounting and tax purposes. Amortization is similar to depreciation, which is used for tangible assets, and to depletion, which is used with natural resources. “ The amortization schedule was strictly adhered to by the debtor as they wanted to pay off the debt as much as we wanted them to. amortization. n. 1. (Banking & Finance). a. the process of amortizing a debt. b. the money devoted to amortizing a debt. DEFINITION of 'Amortization'. 1. The paying off of debt with a fixed repayment schedule in regular installments over a period of time. Consumers are most likely to encounter amortization with a mortgage or car loan. 2. A complete table of periodic blended loan payments, showing the amount of principal and the amount of interest that comprise each payment so that the loan will be paid off at the end of its term. While each periodic payment is the same, early in the schedule, the majority of each periodic payment is interest. The percentage of each payment that goes toward interest diminishes a bit with each payment, and the percentage that goes toward principal increases. Later in the schedule, the majority of each periodic payment is put toward the principal. The last line of the schedule shows the borrower’s total interest and principal payments for the entire loan term.
It is the amount of each installment and how much principal and/or interest is repaid each month.