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What is amortization?

 

What is amortization?

The Bankrate.com financial term of the day is: "amortization."

Amortization is a fancy word for the fairly simple concept of paying off a debt over time, usually in equal installments. Part of each payment typically goes toward the loan principal, and part goes toward interest.

You may think, "Amortization? That's a mouthful -- and what is it?" But you know all about it if you've ever carried a mortgage or made car payments.

To find a great rate on a home loan, visit the Mortgage section at Bankrate.com.

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