WordValeamortization
gradually paying off a debt through scheduled installments
In more detail
1. (noun) the gradual process of paying off a debt, such as a loan, over time through regular payments
2. (noun) in accounting, the process of spreading the cost of an intangible asset over several years
Examples
- 1. The amortization schedule shows how much principal and interest you will pay each month.
- 2. The company recorded the amortization of the patent over 10 years.
How to use amortization
Amortization is primarily used in financial and accounting contexts to describe the systematic reduction of debt or the allocation of intangible asset costs over time. It is a neutral, technical term commonly found in banking, mortgages, and corporate accounting. Unlike repayment (which is broader), amortization specifically emphasizes the structured, periodic nature of the payments.
Common phrases
- amortization schedule
- amortization period
- mortgage amortization
- amortization table
- loan amortization
Synonyms
repayment · payoff · debt reduction · depreciation
Word family
amortize (verb) · amortized (adjective)
A common mistake
Learners sometimes confuse amortization with depreciation; while related, depreciation refers to the decrease in value of tangible assets, whereas amortization is the allocation of intangible asset costs or debt reduction.
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