Loan amortization involves paying off a loan through regular installment payments over a set period. Installment payments are equal and consist of a principal (the amount borrowed) and interest (the cost of borrowing money)—with a larger portion of the payment going toward interest in the early years of the loan, and a larger portion going toward the principal as the loan matures.
This open-access Excel template is a useful tool for bankers, investment professionals, corporate finance practitioners, and portfolio managers.
Loan Amortization is among the topics included in the Quantitative Methods module of the CFA Level 1 Curriculum. Gain valuable insights into the subject with our Math for Finance course.