What is Amortization? — Meaning, Definition & Example
Definition
Amortization is the process of paying off a loan through regular EMI payments over time. Each EMI consists of principal and interest components. In early years, interest component is higher; over time, principal component increases. Amortization schedule shows this breakdown for each EMI.
On a ₹50L home loan at 8.5%/20 years, EMI is ₹43,391. In month 1: ₹35,417 is interest and ₹7,974 is principal. By year 15: ₹15,000 is interest and ₹28,391 is principal.
🇮🇳 Amortization in Hindi / हिंदी में
एमॉर्टाइजेशन — एमॉर्टाइजेशन नियमित EMI भुगतान के माध्यम से समय के साथ लोन चुकाने की प्रक्रिया है। शुरू में ब्याज अधिक और बाद में मूलधन अधिक होता है।
Amortization (Hinglish) — Amortization loan ko regular EMI payments se time ke saath repay karne ki process hai. Starting mein interest zyada hota hai, baad mein principal zyada ho jaata hai.