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Post University Amortization of a Loan Discussion

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Running head: AMORTIZATION 1
Amortization of a Loan
Alvaro Sanchez Alonso
Post University

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Running head: AMORTIZATION 2
Amortize is the financial process by which a debt is gradually extinguished through periodic
payments, which can be the same or different. In the amortization of loans, it is the amount that
we must pay in the agreed term, either monthly, quarterly, semi-annually, etc. The amount to be
paid will depend on the amount that has been requested in the loan, the interest rate and the
agreed term. Payments can be of the same or different amounts. There are a large number of
ways to repay a loan because debtors and creditors can freely agree on the conditions.
We differentiate different ways of repaying a loan, the following being the most common.
Payment of principal in equal installments and interest on balances: it is the most common form
of repayment in personal loans and consumer loans. It consists of the monthly payment of
installments of the same amount throughout the life of the loan, although the amount of capital
and interest that make up that installment will be different for each installment (French method).
A single payment at the end: it is common in mini-credits and consists of paying at the end of the
agreed term the total of the money loaned plus the interest generated.
Payment of interest periodically and payment of the capital at the end: more common in loans
with home equity or loans for companies and that consists of paying only the proportional part of
the interest that will be generated each month, resulting in a lower installment, but at the At the
end of the term, the total loan must be returned.
Some of the advantages of a loan for the borrower are easily access money to buy a product you
want and / or need, such as a car, when you did not have the money to do so.
Being able to invest money in training that will give you a boost in your professional career. If
you are interested in a specialized course, a master's degree or want to learn English, loans give

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Running head: AMORTIZATION 1 Amortization of a Loan Alvaro Sanchez Alonso Post University Running head: AMORTIZATION 2 Amortize is the financial process by which a debt is gradually extinguished through periodic payments, which can be the same or different. In the amortization of loans, it is the amount that we must pay in the agreed term, either monthly, quarterly, semi-annually, etc. The amount to be paid will depend on the amount that has been requested in the loan, the interest rate and the agreed term. Payments can be of the same or different amounts. There are a large number of ways to repay a loan because debtors and creditors can freely agree on the conditions. We differentiate different ways of repaying a loan, the following being the most common. Payment of principal in equal installments and interest on balances: it is the most common form of repayment in personal loans and consumer loans. It consists of the monthly payment of installments of the same amount throughout the life of the loan, although the amount of capital and interest that make up that installment will be different for each installment (French method). A single payment at the end: it is common in mi ...
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