Amortized Loan

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Amortized Loan

A loan with the same payment each pay period. In an amortized loan, different amounts go to principal and interest each month. This allows the lender to receive the full amount of interest while also keeping periodic payments equal. See also: Self-Amortizing loan.
References in periodicals archive ?
The government announced a new round of household debt management measures that focus on reducing risks in loan agreement, such as extending the portion of amortized loans and strictly enforcing the ability-to-repay rule.
And there are other lending products such as Fannie Mae and FHA, which allow 25-35 year fully amortized loans.
They offer below market interest rates for two or three or five years, with no reduction of principal, and then convert automatically into fully amortized loans for the balance of the 30 year term.