Essay: Loan amortization schedule

Sample Essay

What is a loan amortization schedule?

How would you use it to determine your loan interest rate?

What factors would impact your choice between two loans?

A loan amortization schedule is a table which outlines the each periodic payment on an amortizing loan which is generated by an amortization calculator. Every payment is applied towards the interest rate and the principal payment of the loan with the exact amount of the loan applied each as the principle value changes.

The amortization schedule is used for the purposes of the calculation of the specific amount which is being put for interest purposes and the principal payment. In the initial period, much of the repayment amount is devoted to repayment of the interest payments and as the loan matures, than the repayment amount is more devoted towards the repayment of the principal amount itself.

These schedules run in a chronological order as the first payment is assumed to be paid at a time after one full payment time has passed since the loan’s withdrawal.

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