Amortization

Amortization refers to the gradual spreading of the total loan cost (principal amount) and the interest accrued over the entire loan term. Each of your regular loan payments is divided into two portions, principal and interest.

A loan management software can help with amortization by generating and tracking an amortization schedule. This schedule details each payment, showing the breakdown of principal and interest applied. It essentially provides a roadmap for your loan repayment, visualizing your progress and how much of the original loan remains outstanding over time.