Personal Finance Word of the Day: Amortization

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Word of the day: Amortization

Amortization is the gradual repayment of a debt over a set period of time. Examples include a monthly mortgage payment, student loan, or a credit card balance.

In order to amortize a loan, your payments must be big enough to pay the accrued interest and reduce the principal.

Fun fact: The origin of the word amortize means “to kill,” according to Merriam-Webster.

 

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