When it comes to loans, amortization describes the process of repayment – either over time through regular instalments or with a single payment at the end of the loan term. It is often also referred to as “repayment” of a loan. This usually includes the loan repayment instalment and interest.

There are various ways to amortize a loan. The difference is, for example, how the instalments or monthly rates are made up and when they are due. For a more detailed explanation of the different amortization models, see “Repayment”.