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Updated Jun 25, 2019. Fully amortizing payment refers to a periodic loan payment where, if the borrower makes payments according to the loan's amortization schedule, the loan is fully paid off by the end of its set term. If the loan is a fixed-rate loan, each fully amortizing payment is an equal dollar amount.
Thereof, what does amortized payment mean?
Amortization is the process of spreading out a loan into a series of fixed payments over time. You'll be paying off the loan's interest and principal in different amounts each month, although your total payment remains equal each period. The interest costs (what your lender gets paid for the loan).
Besides, what is an example of amortization?
Amortization is the process of incrementally charging the cost of an asset to expense over its expected period of use, which shifts the asset from the balance sheet to the income statement. Examples of intangible assets are patents, copyrights, taxi licenses, and trademarks.
Amortization is a simple way to evenly spread out costs over a period of time. Typically, we amortize items such as loans, rent/mortgages, annual subscriptions and intangible assets. In order to spread the total cost according to the agreement evenly over the life of the terms, we amortize.