Business & Accounting
Amortization
Definition
The process of spreading a loan or asset cost over a series of fixed payments over time. In the context of loans, an amortization schedule shows how each monthly payment is split between principal (paying down the loan balance) and interest. Early payments are mostly interest; later payments are mostly principal. In accounting, amortization refers to spreading the cost of an intangible asset (like software or a patent) over its useful life. Amortization schedules are essential for understanding the true cost of mortgages, car loans, and business loans.
Related Templates
These SheetCraft templates use or relate to Amortization:
- Rental Property Analyzer, Evaluate rental deals with cap rate, cash-on-cash return, and 10-year cash flow projections, plus a multi-property portfolio tracker.