What is Loan Amortization, Really?
- An amortized loan is a type of loan with scheduled, periodic payments that are applied to both the loan’s principal amount and the interest accrued.
- As you continue to make monthly payments, the portion of your fixed payment that goes to interest is less and less and the portion that goes to reducing your loan principal is more and more.
- There are two key differences between Residential and Commercial Real Estate (CRE) loan amortization schedules.