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If these fees are insignificant they can be expensed at the time incurred. On larger loans these fees can be materially significant. In these cases, the origination fees associated with the loan can be capitalized and amortized over the life of the loan.
To amortize a loan, use the table above as an example: 1  Note your starting loan balance: $20,000. 2  Figure out the payment (calculation shown on this page): $377.42. 3  Figure out the interest charge for each period â usually monthly (calculation shown on this page): $83.33 in the first month.